(CercleFinance.com) – Wall Street began the fourth stock market quarter without direction: the three main indices remained almost stable and perfectly homogeneous, which is not so frequent (and the sector-by-sector differences were also insignificant).
The Nasdaq thus gained +0.01%, the S&P500 +0.07% and the Dow Jones +0.02%… but the Russell-2000 stood out with -0.7%, further worsening its decline. -performance when it was already lagging considerably since January 1st against the ‘S&P’.
The ‘Russell’ only experienced three positive sessions out of the first 11 in September (including that of September 1 where the index recorded its best score) and above all – this is the most remarkable – only posted only one positive week out of the last eight.
The message conveyed by the weakness of this index seemed clear: managers did not want to be invested in illiquid stocks in case an unpleasant surprise forced them to reduce their portfolios within 48 hours.
However, there is little suspense regarding the Fed’s monetary policy decision on Wednesday: it should in all likelihood (FedWatch consensus of 99%) opt for a ‘status quo’ in terms of its rates.
‘This choice is due to the fact that inflation and the labor market are both moving in the right direction from the Fed’s point of view, making further rate hikes less necessary,’ Commerzbank explained.
But investors are above all waiting to read the projections and statements from Jerome Powell, the president of the institution, which could foreshadow an increase in early November.
In the opinion of analysts, the 35% rise in oil prices observed since the end of summer, as well as the good health of the American economy, risks pushing the Fed to maintain a restrictive approach.
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