Wall Street regains height while awaiting inflation figures
The New York Stock Exchange is picking up, the S&P 500 and the Russell 2000 rising nearly 2% since Thursday, benefiting from a mixed employment report and statements from some Fed members.
Job creations came out well above expectations, at 261k against 200k expected, but the unemployment rate rose more than expected to 3.7%, against 3.5% previously and 3.6% expected. The larger-than-expected rise in the jobless rate suggests that monetary tightening may ultimately be less than expected as it begins to impact the job market, but more data to that effect will be forthcoming. required.
Moreover, the presidents of the Richmond and Boston Fed fueled speculation that the Fed’s monetary tightening was likely to slow, but nevertheless suggested that the terminal rate could be higher.
Wall Street could continue to recover in the short term, but the release of inflation figures on Thursday poses a threat. The CPI is expected up 0.6% month on month in October, from 0.4% in September, but the Atlanta Fed estimates it up 0.8%. Higher-than-expected inflation would greatly dampen expectations of a slowdown in monetary tightening by the Fed, which would put pressure on equity markets.
Equity markets will also closely follow the results of the midterm elections, but the impact seems very uncertain. For Wall Street, the best is probably a divided Congress in order to limit the greater excesses of the White House, especially in this period of hyperinflation, as the Biden administration adds fuel to the fire by running deficits.
Russell 2000 daily price chart – key levels