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Wall Street in the red while waiting for the Fed’s decision

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(New York) The New York Stock Exchange moved slightly in the red Wednesday after the opening while awaiting the decision of the American Central Bank (Fed) which holds its last monetary meeting of the year.

Around 9:50 a.m., the Dow Jones dropped 0.36%, the NASDAQ lost 0.59% and the S&P 500 dropped 0.31%.

On Tuesday, the Dow Jones ended down 0.30% to 35,544.18 points, the technology-heavy NASDAQ index fell 1.14% to 15,237.63 points and the expanded S&P index 500, from 0.75% to 4634.09 points.

All eyes were on the Fed and its President Jerome Powell’s press conference scheduled for 2:30 p.m.

Given the acceleration of inflation in the United States, which reached a peak in nearly forty years at 6.8% over one year (CPI index), members of the Central Bank’s Monetary Committee (FOMC) suggested on several occasions that it was ready to accelerate the withdrawal of its monetary support.

This would imply the possibility of raising interest rates earlier in the course of 2022. The Fed will also publish new economic forecasts and investors will watch the projections of the level of rates over the next two years by each of the members of the Monetary Committee (“dot plot ‘).

Within minutes of opening, yields on 10-year Treasuries remained calm at 1.44% as the previous day while the dollar was silent, stable at 1.1259 dollars to the euro.

The day was also rich in indicators with retail sales weaker than expected for November (+ 0.3% instead of + 0.8% expected by analysts.

The import price index, on the other hand, jumped 0.7% last month after rising 1.5% in October. Export prices even climbed stronger in November, by 1% against 0.5% expected.

At the same time, the Empire State index of manufacturing activity in the New York region, as measured by the Fed, accelerated against all expectations to 31.9 points.

“The market can move in any direction today because there is so much information to digest with the FOMC directive headlining,” Briefing.com’s Patrick O’Hare said in a commentary. note.

According to him, at the end of the monetary meeting, “we can be sure that there will be an agreement to leave the target range of the federal funds rate unchanged at 0.00-0.25%”.

“We can also be fairly certain that a plan will be updated to double the rate of reduction in asset purchases to $ 30 billion per month, from $ 15 billion,” he added.

Finally “we can be reasonably certain that the dot plot will show at least two rate hikes on average in 2022, and perhaps three, but this is less certain”. The Fed’s announcement also precedes decisions from the European Central Bank, the Bank of England and the Bank of Japan on Friday.

Among the stocks, the home furnishings and DIY chain Lowe’s, which lost more than 3% before the opening, dropped only 0.16% to 252 dollars after disappointing sales forecasts in the eyes of analysts for 2022.

The pharmaceutical group Eli Lilly was hailed (+ 4.65% to 260 dollars) on the contrary after having raised its forecasts of turnover and results for 2022, holding its objective of having launched, for ten years in 2023, a twenty new treatments.

The titles of the Californian laboratory Vir Biotechnology (VIR), partner of the British GlaxoSmithKline on a treatment against the coronavirus, jumped 13.71% to 52.85 dollars. The group indicated in a study which remains to be confirmed that its experimental treatment remained relatively effective against the new variant Omicron.



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