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Stocks on both sides of the Atlantic fell on Wednesday as investors waited for the minutes of the Federal Reserve meeting, which will provide clues to the direction of support in the crisis era, and thus provide support for financial markets.
After Wall Street’s S&P 500 index fell 1.3% at the opening, it fell for the third consecutive trading day, while the Nasdaq Composite Index, which is dominated by technology stocks, fell 1.4%.
The decline was caused by weak trading hours in Europe. In London afternoon trading, the Stoxx 600 for the entire region fell by 1.9%, close to the benchmark index’s largest daily decline this year.
The move came before the release of the minutes of the Fed’s latest monthly meeting on Wednesday.
Luca Paolini, chief strategist at Pictet Asset Management, said investors will carefully check the minutes of the meeting to see that the world’s most influential monetary policy makers are considering reducing the $120 billion in bond purchases per month, which will help support stocks. Valuation and restrict the issuance of government bonds. Yield.
Federal Reserve Chairman Jay Powell (Jay Powell) adhere to The bank will maintain its ultra-loose stance until the US labor market recovers from the pandemic.
“[But] The Fed can’t stay aside forever,” Paulini said. “The danger is that the market really starts to see them as the back of the curve” and then worry that “the panic response will come too late.”
The yield on the 10-year U.S. Treasury bond has climbed from about 0.9% at the beginning of this year to a low on Wednesday, falling 0.01% to 1.63%.
Paul Jackson, head of Invesco Asset Allocation Research, said that after the stock market rebound that began in March last year and the strong corporate earnings season on both sides of the Atlantic, investors are also looking for excuses to consolidate some of their earnings.
Since mid-March 2020, the Stoxx 600 in Europe has risen by about 55%, and the S&P 500 on Wall Street has risen by more than 80%.
Jackson said: “There is already a lot of good news on prices, and it is difficult to see where the next catalyst for a further rebound will come from.”
He added that another concern is that “global growth is good enough that you will suffer more inflation and the central bank has cancelled their support”. Compared with the same period last year, the overall consumer price inflation rate in the United States reached 4.2% in April, the largest increase since 2008.
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Columbia Threadneedle’s portfolio manager, Maya Bhandari, said after factory activities and retail sales that inflation has eroded the actual returns of stocks and bonds and “has now become a problem in the Eurozone.” Flourish In April.European Central Bank last week improve The EU’s expectations for growth and inflation in the Eurozone have opened up further debates over whether the pace of pandemic bond purchases should be slowed down.
In terms of currencies, the pound fell 0.3% to $1.414 against the dollar, and the euro was flat at $1.221 against the dollar. At the same time, the U.S. dollar rose slightly against a basket of currencies by 0.1%.
The global oil price indicator Brent crude fell 3.6% to $66.26 per barrel. Brent crude oil briefly touched $70 a barrel for the third time during the pandemic on Tuesday.
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