Fed May Raise Interest Rates If Inflation Continues To Rise

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The U.S. stock market ended Wednesday’s trading without a single dynamic. The oil and gas, technology and financial sectors showed positive dynamics. Negative dynamics were in the health care and consumer goods sectors. The Dow Jones was down 0.03% at the end, the S&P 500 was up 0.23%, and the NASDAQ added 0.44%.

The number of new unemployment claims in the United States was 199,000; analysts expected 260,000. The estimate of the U. GDP growth was improved to 2.1% from 2% in the third quarter; a revision to 2.2% was expected. U.S. household income rose 0.5% in October compared to the previous month according to the U.S. Department of Commerce. At the same time, US spending rose by 1.3%. Sales of new homes in the U.S. in October rose 0.4% over the previous month to 745,000 in annual terms.

A Federal Reserve meeting protocol showed that policymakers are willing to raise interest rates if inflation continues to rise. Fed officials concluded that easing inflationary pressures may take longer than previously estimated.

European stock indices were also trading without a single dynamic yesterday. Germany’s DAX was down 0.37%, France’s CAC 40 was down 0.03%, Spain’s IBEX 35 was down 0.26%. Meanwhile, the British FTSE 100 gained 0.37%, the Italian FTSE MIB jumped 0.63%. Investors are still closely monitoring the situation with the spread of COVID-19 in the region. Germany has said it will impose complete retirement today. Germany’s Ifo business climate fell for the fifth consecutive month to 96.5 in November against expectations of 96.6. According to the national statistics office Insee, the value of the trade confidence index in France rose to 109 points in November from 107 points a month earlier. Meanwhile, the number of people suffering from COVID-19 on Tuesday in France for the first time since August exceeded 30,000 people.

Oil stabilized after the United States announced an agreed release of strategic shares with other countries that did not meet expectations. The focus now is on OPEC + and how the group will respond to the move. The alliance said releasing reserves is an unjustifiable move due to current market conditions. In addition, they assume that OPEC + may need to revisit plans to increase supply at its monthly meeting. OPEC + is scheduled to meet on December 1-2.

New White House sanctions against Nord Stream 2 appear likely to have limited impact but will exacerbate the political problems Europe’s supply chain faces ahead of an uncertain winter.

Asian stock indices are growing today. Japan’s Nikkei 225 index has risen 0.67% since the market opened, Hong Kong’s Hang Seng added 0.24%, and Australia’s ASX 200 added 0.11%. Meanwhile, China’s benchmark CSI 300 index declined 0.41%. The growth leaders among Asian companies were Sony and Alibaba.

Main market quotes:

  • S&P 500 (F) 4,701.46 +10.76 (+ 0.23%)
  • Dow Jones 35,804.38 −9.42 (−0.03%)
  • DAX 15,878.39 −58.61 (−0.37%)
  • FTSE 100 7,286.32 +19.63 (0.27%)
  • USD 96.82 +0.33 (+ 0.34%)

Important events today:

  • German GDP (q / q) at 09:00 (GMT + 2);
  • Eurozone Monetary Policy Accounts ECB At 14:30 (GMT + 2);
  • Speech by President Lagarde of Eurozone ECB at 15:30 (GMT + 2);
  • Speech by UK BoE Governor Andrew Bailey at 19:00 (GMT + 2).

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