The us stocks registered Profits this Monday, recovering part of the losses of the worst week of Wall Street since the beginning of December.
The index S&P 500 It rose 0.6% in morning trading for its second rise in the past seven days. The average Dow Jones Industry rose 0.4%, while the nasdaq The composite was up 0.8% at 11 a.m. local time.
Stocks have suffered in February after a strong start to the year as reports have shown that the inflation and much of the broader economy remains more resilient than expected. Although the strong economic data allay fears that a recession may be imminent, they have also forced Wall Street to raise its forecasts about how high the Federal Reserve will increase interest rates and how long to keep them.
High rates can reduce inflation, but they can also increase the risk of recession in the future because they slow down the economy. They also affect the prices of shares and other investments.
The increase in expectations of rate hikes has been more evident in the bond market, where yields have skyrocketed in recent weeks. On Monday, the 10-year Treasury yield eased a bit, easing some of the pressure on stocks.
He 10-year treasury yield it fell to 3.92% from 3.95% on Friday. Helps set interest rates on mortgages and other major loans.
The two-year yield, which moves more in line with Federal Reserve expectations, rose to 4.82% from 4.81%. It is close to its highest level since 2007.
Yields dipped after a report showed that orders for machinery, aircraft and other long-lived manufactured goods fell more than economists expected in January.
Economists have been waiting more weakness in the economy after the Fed raised rates last year at the fastest pace in decades. The overnight interest rate Federal Reserve it is now between 4.50% and 4.75%, compared to practically zero at the beginning of last year.
However, in recent weeks, reports on the labor market, retail sales and inflation itself have been stronger than expected. The fear is that if the economy holds up, inflation will be pushed up. For this reason, the Wall Street expectations they have varied so much: before it was thought that the Federal Reserve could soon lower interest rates and now it is believed that it could raise them above 5.25%.
Even Monday’s weaker-than-expected durable goods report had some underlying strength. Disregarding transportation-related equipment, orders increased last month until reaching the highest rise since March. It was much stronger than the drop that economists expected.
On Wall Street, stocks of Union Pacific They rose 10.7%, one of the biggest gains in the market, after the rail company announced plans to replace its chief executive at the end of the year. The company has been under pressure from a hedge fund with a large stake in it.
The technological values they also helped pave the way. They tend to be some of the biggest beneficiaries of interest rate easing, which helps lift the stocks of high-growth companies in particular.
Manzana, Tesla and Microsoft they were the three biggest bullish forces in the S&P 500. All were up at least 1.1%. All rose at least 1.1%.
the energy company AES It rose 3.6% after posting better-than-analysts-expected earnings and revenue for the latest quarter.
Most companies have already submitted their results corresponding to the last three months of 2022but a couple dozen S&P 500 companies are still scheduled to file their reports this week.
Overall, this earnings season has been mediocre. S&P 500 companies are on track to record their first profit drop per share since the summer of 2020, when the pandemic was choking the economy.
Also, fewer companies than usual are beating analysts’ earnings expectations, according to FactSet.
The concern is that a “earnings recession”, in which corporate profits decline from prior-year levels for at least two consecutive quarters. Rising rates and other costs have been eating into companies’ profit margins, meaning they no longer make as much profit per dollar of sales as they used to.
positive europe
The european bags They also rebounded at the open on Monday, buoyed by the EU-UK deal on the Northern Ireland border.
The London Benchmark FTSE 100 it gained 0.7% to 7,933.88 points, compared to Friday’s closing level.
In the euro zone, the index DAX from Frankfurt rose 1%, to 15,364.96 points, and the ACC 40 from Paris also gained 1%, up to 7,258.98 points.
European markets had also fallen on Friday on investor concern that better-than-expected US inflation data would push the Federal Reserve to raise interest rates more aggressively.
(With information from AP and AFP)
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Source-www.infobae.com