The resistance of the Nasdaq Monday evening surprised many, and this turnaround in the midst of the debate on the change of perspective of the US Federal Reserve could reflect a less strained approach to inflation. The market is awaiting comments from Jerome Powell on this point in the hope of getting some insight into the timing of the Fed’s rate hikes.
In New York, the Dow Jones and the S&P 500 ended slightly lower yesterday, while the Nasdaq Composite managed to scavenge 0.05% after losing more than 2% during the session. Markets are focused on the US consumer price statistic, which will be released on Wednesday, as inflation has surged in recent months on both sides of the Atlantic, increasing pressure on central banks .
Does the Fed have an interest in sowing chaos?
From two to three rate hikes expected until recently, the market is now targeting four Fed monetary tightening this year, as well as implementing the process of reducing its balance sheet in the second half of the year. Some observers believe, however, that several transient factors such as tensions on supply chains and disruptions related to the Omicron variant should subside, which could give central banks more leeway.
” The question is, does the Fed have any interest in wreaking havoc on the markets for the sole purpose of fighting inflation? The answer is no, says Ipek Ozkardeskaya, senior analyst at Swissquote. And to continue: this is why everything will depend on the indicators and in view of the recent ‘hawkish’ reversal of the market, it is possible that we will see a calming of this positioning, which could lead to a favorable correction to the recent selloff on equities “.
Airbus exceeds its targets
In remarks sent to senators ahead of his Senate hearing this afternoon, Jerome Powell says the Federal Reserve will do everything to prevent inflation from taking hold. He adds that the nature of post-pandemic growth may be different from previous periods of expansion. ” The pursuit of our objectives will have to take this difference into account. “, did he declare. Senators are expected to confirm Jerome Powell’s reappointment for a second term at the head of the Fed, and they will be sure to question him about the price pressures and the timing of the rate hikes.
Airbus announced that it exceeded its target of 600 commercial aircraft deliveries in 2021, with 611 aircraft shipped over the past year as a whole, and expressed confidence in increasing production in 2022 despite tensions in the the supply chain.
Among analysts’ notes, Morgan Stanley downgraded FDJ from “online weighting” to “underweighting”. HSBC for its part raised its price targets on Societe Generale from 28 to 34 euros, Agricultural credit from 16.5 to 17.5 and BNP Paribas from 75 to 81. RBC improved its target price on LVMH from 785 to 820 euros.