Stock rally gains steam heading into the close, with the Dow jumping more than 450 points.
Wall Street returns to the green this Friday, with increases of 0.6% on average, to end a volatile week, but of gains, after all. The ‘vaccine effect’ continues to wane while waiting for new news, and Disney (+ 3%) and Cisco (+ 6%) stand out as protagonists after beating expectations with their quarterly results.
“This week has been positive thanks to the vaccine, and that changes the rules of the game”, recognize the experts from JP Morgan. “It has allowed the markets to look beyond the recent upsurges towards the reopening of the economy,” they add.
In terms of monetary policy, this Thursday the president of the Federal Reserve (Fed), Jerome Powell, acknowledged that the US economic outlook remains uncertain. “The next few months may continue to be challenging,” he said, and also that “we have to do more, the (US) Congress should do more.” “So far the United States has not seen the worst and therefore more needs to be done in terms of monetary and fiscal policy,” emphasized the central banker.
At the macroeconomic level, this Friday the October producer price index stands out, gaining momentum by rising to 0.3%, one tenth above the consensus estimate (0.2%). It has risen due to an increase of 2.4% in food prices, and the 0.8% increase in the energy component, mainly gasoline. “Product prices normalized further in October, indicating that price dynamics are recovering after the strong deflationary crisis in the spring. While price increases were slightly higher than expected, pressures Inflationary rates remain generally weak and will support the strong accommodative bias of the Federal Reserve “, point out the experts from Oxford Economics.
The data on consumer confidence prepared by the University of Michigan, corresponding to November, has also been known, which has fallen to 77 from the 81.8 registered the previous month, also being below the figure expected by the consensus ( 82). “The elections have consequences, especially for sentiment among Republicans,” says Pantheon Macroeconomics, as these are the ones that have lowered their economic expectations the most.
“The joy that the Democrats felt seems to have been offset by other factors, such as the increase in infections and hospitalizations due to Covid,” continue the experts of this firm, who believe that with the numbers of infections worsening day by day, it is to be expected that “Consumer sentiment will deteriorate in the coming months.”
Returning to the business front, the US has finally reversed Donald Trump’s order to close TikTok, which is waiting to know what the decision of the Administration of President-elect Joe Biden will be. Also noteworthy are the increases experienced by Disney and Cisco after having reported their accounts for the last quarter.
On the other side of the Atlantic, the Ibex relies on Naturgy and its banks to rise to 7,800 points. Finally, in Asia, stocks have closed mixed between the rebounds and Tencent’s results, which have exceeded the consensus.