After a black first half of the year, Wall Street recorded in July its best month since November 2020, with clear increases thanks to the good business results and the expectation that inflation may be beginning to be controlled and there will not be many more increases in interest rates.
(The United States enters the ‘limbo’ of the technical recession).
The New York Stock Exchange ended Friday, July 29, on the rise for the third consecutive day, with progress of 0.97% for the Dow Jones Industrials, 1.42% for the selective S&P 500 and 1.88% for the Nasdaq Composite Market Index. For the week as a whole, the Dow gained 3%, the S&P 500 4.3% and the Nasdaq, helped by the positive results of the technological giants.
With these gains, the three major Wall Street indices closed a very positive month of July, in which the Dow Jones added 6.7%, the S&P 500 rose 9.1% and the Nasdaq soared 12.4%. . These are the biggest monthly gains since November 2020, when the announcement of the first effective vaccines against covid-19 had propelled the stock markets.
This rebound comes after a disastrous first half of the year for Wall Street, its worst first half since 1970, as a result of the war in Ukraine, inflation and fears of a possible recession.
(USA enters a technical recession: its dangers and effects in Latin America).
According to analysts, there are mainly two factors behind this turnaround: better-than-expected quarterly results for many large US companies and a bet that the Federal Reserve (Fed) will begin to curb interest rate hikes with the trying to contain prices.
That was the feeling left in investors by the last appointment of the central bank, in which an increase of 0.75 points was approved, and it has been reinforced by various economic data, including the evolution of the Gross Domestic Product ( GDP), which was released yesterday and showed that the US economy contracted for the second consecutive quarter.
This situation of technical recession suggests that the Fed will soon stop its plan to raise interest ratesalthough the economic situation remains unclear in the United States, as this slowdown in activity contrasts with solid data on consumption and job creation.
In fact, some analysts such as Ed Moya, from the Oanda firm, warned today that economic indicators should prepare investors for “an aggressive Fed” that opts for more significant increases in the price of money.
Other experts, meanwhile, considered Excessive optimism this month on Wall Street and stressed that difficult months lie ahead, especially if growth continues to erode and inflation does not come down as fast as some expect.
In the business section, most companies that have presented quarterly accounts have exceeded expectations, and especially several technological giants that have great weight and have encouraged the market in recent days. Amazon, for example, soared more than 10% today after reporting better-than-expected sales, while Apple gained a solid 3.28% thanks to earnings 6.7% higher than in the first half of the year. past.
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