On Wall Street, last week S & P 500 and NASDAQ index reached record levels. While in the other world stock exchanges, more caused by the deadline because the deadline after which Washington could increase customs.
On Wall Street, Dow Jones jumped 2.3 percent last week, at 44,828 points. While S & P 500 increased 1.7 percent, at 6,279 points, and the NASDAQ index 1.6 percent, to 20,601 points.
The new S & P 500 records and NASDAQ indexes thank you to find the investor that the US Central Bank will reduce interest rates sharper than expected.
Among others because the president of the USA is requested by Donald Trump, which tells that interest should range around 1 percent, while they are now above 4 percent.
The President of the Fed Jerome Powell says, on the other hand, that it should not be rushed with the reduction of interest. He explains that the situation in the economy is good, while inflation could increase in the following months due to the increase in customs months.
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On Thursday, the report was published, according to which 147,000 new jobs were opened in the United States. This is 33 percent more than expected. The unemployment rate fell to 4.1 percent.
This data indicate a stable economy growth, which is good news and shows that Powell is right when he claims that it should not be rushed with the reduction of interest. Although after that report, the speculation of the sharper reduction in interest rate is, the prices are stock and rose again.
“We testify to the right wave of irrational enthusiasm, is really optimistic. But for that, there is a certain level of relief because employment report was not as it could be,” Kristina Hooper from Man Group.
At the end of last week, Republicans in the Representative House supported the Law on Reduction of Tax and Public Spending, which Trump calls ‘large, beautiful law’.
The law will increase the public debt of the US for $ 3,400 billion in the coming years, the non-partisan Congress Budget Office. Also, millions of Americans will deny health insurance.
High tax reduction and increased state spending can encourage demand, but it can also strengthen inflation pressures.
“Some data, such as employment reports are positive and charming. But if we move away from the picture just a little, she is not so bright,” says Alex Morris from F / M Investments.
Caution due to trade negotiations
In contrast, Wall Street, asian and European stock exchanges last week was traded cautiously. Investors were not prone to more risky investments because it is approaching 9. July. This is the deadline to which Washington wants to reach a deal with trade partners or will increase customs duties, FINANCE BA.
So far, the White House has announced that it has reached an agreement on trade only with Vietnam, as well as in principle agreements with China and Great Britain.
Investors are insecure because Trump says one day that he could move that deadline, but another that there is no deviation from deadlines. In addition, he said he would start sending letters to partners with new customs.
Until recently, it was considered that the United States could quickly reach Japan and South Korea, but these negotiations do not seem to be so smoothly as expected.
“We are now just waiting for 9. July. Investors are not optimistic, especially not in terms of negotiations with Japan and South Korea,” explains Tony Sycamore, analyst in the company Ig.
