US indices erased yesterday’s gains due to investors’ mistrust of the Fed’s ability to control inflation.
Wall Street suffers another day to forget. The intervention of the president of the Federal Reserve, Jerome Powell, yesterday encouraged investors to accelerate purchases in the final stretch of the session, but today’s session presents a completely different scenario. The market has more and more doubts about the US central bank’s roadmap, as well as its ability to contain inflation.
“The Fed has a very narrow needle to thread and I think investors and the market in general are losing a lot of confidence that the Fed can do that,” said Ryan Detrick, chief market strategist at LPL Financial.
One more day, technology companies are the main victims of the concern that prevails in North American equities. The Nasdaq plummets another 4% today and falls to 10,650 points, raising the accumulated losses since the beginning of 2022 to 32%. The large companies in the sector, which yesterday led the indicator to gain 2.5%, erase by complete all the ground gained. Meta is the company most punished by investors, sinking more than 5%. Amazon, which yesterday led the advances, leaves 4.5%, while Apple and Alphabet give up more than 3.5%. Microsoft is the only Big Tech company to keep losses below 3%.
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For its part, the Dow Jones falls 2.2%, to 29,900 points. The selective New Yorker has already plummeted almost 20% from the maximum registered on January 5 of this year. Procter
“It’s about time we got out of this artificial world of massive predictable liquidity injections where everyone gets used to zero interest rates; where we do dumb things, whether it’s investing in parts of the market we shouldn’t be investing in or investing in the economy in ways that don’t make sense,” Allianz chief investment adviser Mohamed El-Erian told CNBC. “We are leaving that regime and it is going to be bumpy,” he warned.
In the oil market, a barrel of West Texas, a benchmark in the US, remains at 115 dollars. The ounce of gold is close to 1,850 dollars, while the return on the US 10-year bond stands at 3.3%.
