The New York Stock Exchange falls this Friday and reduces the profits you made during the weekafter the US released an employment report showing a job market that remains strong.
The market reads that this drop in unemployment could reinforce the decision of the Federal Reserve, the US central bank, to continue raising interest rates to fight inflation.
The fall of the Dow Jones (1.7%), together with the Nasdaq (3%) and the S&P 500 index (2.13%) dragged down the Argentine bonds and stocks listed on Wall Street. Dollar Bonds Fall Up to 1.5% (Global 20), continuing the decline experienced on Thursday.
The decline in Argentine debt securities increased country risk by 1% 2,800 basis points.
On the other hand, the actions show strong drops: Globant loses 7.8%, Supervielle 5.2% and The free market makes 4.3%. Some newspapers, however, show increases, such as those of YPF, TGS or Tenaris, but all under 2%.
What can happen with the Fed rates
“If unemployment (in the US) remains low, employers will raise wages to attract talent, creating more disposable income. The increase in purchasing power will therefore lead to greater demand for goods and services, driving up prices and potentially driving up rates by the Fed, ”said Steve Rick, chief economist at CUNA Mutual Group, according to Marketwatch.
Federal Reserve Governor Christopher Waller said Thursday that he doesn’t expect the job report to change anyone’s mind at the central bank.
“A number of jobs [alrededor de 260.000] coupled with the job opening rate reported on Tuesday, would show that the job market is slowing slightly, but is still pretty tight. Consequently, I do not expect the employment report to alter my view that we should be 100% focused on reducing inflation, “she said.
Of course, it is in the Fed’s best interest not to signal a policy change until it is ready to do so, given its belief that maintaining tight financial conditions will help reduce inflation.
Source: Clarin
