0.6% losses in Wall street before the renewed fear unleashed by the chinese coronavirus. Global economic growth is in doubt and uncertainty is also felt in raw materials such as oil.
The president of the Fed himself, Jay Powell, he said Wednesday, after the central bank meeting, that "uncertainties about the prospects persist, including those posed by the new coronavirus", who nevertheless hoped" that moderate economic growth will continue. "
"There will clearly be implications, at least in the short term, for the chinese production; and I guess for some of his closest neighbors. We will have to see the effect of the coronavirus worldwide, "he added.
As a positive factor, Powell noted that "uncertainties about world trade have diminished"After the trade agreement between China and the US," which will undoubtedly "be positive for the economy."
Caterpillar, one of the thermometers of the US stock market for global uncertainties, yields 1%. Attention also to Tesla. Those of Elon musk they shoot up 10% after surprising again with their quarterly results.
Microsoft It is also taking the applause of the market after beating expectations with their accounts and celebrates it with increases of 4%. The other side of the coin is being Facebook, with a collapse of 7%, being unable to convince with their numbers.
DECISIONS OF THE FEDERAL RESERVE
The US Federal Reserve kept interest at 1.5% -1.75% and rated current interest rates as "appropriate" in line with forecasts.
"The Committee judges that The current monetary policy stance is appropriate to support the sustained expansion of economic activity, the strong conditions of the labor market and the inflation that returns to the symmetric objective of 2%, "explained the central bank.
Further, the Fed raised the IOER to 1.6% from 1.55%, in line with the forecasts. Experts had already anticipated this increase in the interest rate of excess reserves to adjust it to the effective interest rate of federal funds.
Finally, the agency noted that "will continue to purchase treasury bills at least until the second quarter of 2020 to maintain ample balance of reserves in its balance sheet at the level that prevailed at the beginning of September, "when there were tensions in the US money market. This movement also stood in line with the planned, although many analysts consider these 'technical' purchases as a covert QE that drives Wall Street.
In macro matter, this Thursday the US GDP, which increased 2.1% in the fourth quarter, in line with consensus forecasts. Taking into account the whole of 2019, the US economy slowed to 2.3% from the 2.9% registered in 2018, which represents the weakest expansion since 2016, due to the fall in business investment and commercial tensions
On the other side of the Atlantic, the Ibex and the rest of Europe keep the strong falls also under pressure from the Wuhan virus. Red has also persisted in Asia as coronavirus cases increase and they already exceed those of the SARS outbreak, between 2002 and 2003.
In other markets, oil West texas falls 2.4%, up to $ 52.03, for the forecast of a lower demand from China, the largest importer of oil in the world. And the ounce of gold up 0.5%, up to $ 1,584, for investors' preference for safer assets. In addition, the profitability of 10-year American bond goes up to 1.56% and the 2-year bond goes down to 1.40%. Finally, the euro 0.13% is appreciated and changed to $ 1.1023.