(News Bulletin 247) – The New York Stock Exchange should open without much direction on Wednesday morning pending the publication of the Federal Reserve’s monetary policy statement.
Half an hour before the opening, the futures contract on the Dow Jones index fell by 0.1%, while that on the Nasdaq 100 advanced by 0.1%, suggesting a hesitant opening.
The Fed will announce in the early afternoon, after two days of debate, what will be its monetary policy decisions. Half an hour later, its president, Jerome Powell, will speak at a press conference.
Economists agree that the Fed should opt for a ‘status quo’ on rates after systematically raising the cost of money in its previous ten meetings, that is to say since the beginning of 2022.
Inflation fears seem all the more assuaged as yesterday’s publication of the consumer price index showed that prices rose only 4% in May, the lowest since March 2021.
The announcement this morning of a slight decline (-0.3%) in producer prices last month does not appear to be such as to call into question the scenario of a ‘pause’ on the part of the Fed.
If these figures are rather reassuring, UBS strategists still recommend that investors be cautious on the equity markets.
‘We do not interpret the data for the month of May as sufficient to
to allow the Fed to put a definitive end to its monetary tightening cycle,” argues Mark Haefele, chief investment officer of the Swiss bank’s wealth management.
“Nor do we believe that these numbers can justify the recent renewed optimism that has shrouded the equity markets,” adds the analyst.
For Mark Haefele, core inflation – which excludes the volatile elements of energy and food – still remains well above the Fed’s target.
At the same time, it seems to him that investors today are far too optimistic about the prospect of a soft landing for the economy.
A bet that seems dangerous to him when the US equity markets are trading at 18.4 their profits, a premium of 14% compared to their average over the last 15 years.
On the bond market, the yield on ten-year paper fell towards 3.78% while the dollar fell against the euro, which rose to around 1.0830.
On the energy side, a barrel of Texan light crude (WTI) rose again by 1% to 70.2 dollars pending the publication, in the afternoon, of weekly oil inventories.
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