Next week’s Fed committee meeting will be key. Nervousness on the stock market, especially on the Nasdaq, has gone up a notch. Some results were disappointing.
A page will turn. The major world markets have an appointment on Tuesday 25 and Wednesday 26 January with the American Federal Reserve (Fed), which is meeting its committee. What surprise will she have in store for them?
The stakes are high, since it is a question of fighting against galloping inflation without collapsing the markets, watered for years by an impressive flood of liquidities. The Tina Effect (There is no alternative) the origin of the formidable performance of equities has its source in this ultra-accommodative policy of the Fed. What will happen when investors can invest their money, risk-free, in government bonds offering a safe return of around 2% and more? The US 10-year bond rose to 1.9% mid-week and, in Europe, even the same-maturity German Bund rose briefly back into positive territory, a first since May 2019. These questions are making stock markets increasingly nervous. . This week, Wall Street persuaded itself that rates would be raised by 50 basis points (not 25 basis points) as of March and that the Fed’s balance sheet reduction would take place before the end of the year. . Also, the Nasdaq, the compartment where technology stocks are considered very expensive, entered the correction phase on Wednesday, that is to say that it posted a decline of more than 10% compared to the high point of the month of November 2021 (-12.4%, Friday, at 5 p.m.). For its part, the Dow Jones suffered five sessions of decline in a row.
Investors could not even console themselves with the quarterly results. Those of Goldman Sachs and especially Netflix have disappointed, which does not bode well for the future. Apple, IBM, Intel, Microsoft and Tesla must return their copy before the end of the month. The last week of January is likely to be the week of all dangers.
SYLVIE AUBERT