(CercleFinance.com) – The New York Stock Exchange should open higher on Friday morning, a targeted intervention by the central bank of China having helped to dissipate somewhat concerns related to the slowdown in growth.
Half an hour before the opening, futures contracts on the major New York indices are gaining between 0.7% and 1%, announcing a recovery after the two difficult sessions on Wednesday and Thursday.
The People’s Bank of China (PBC) announced overnight that it had cut one of its benchmark rates as part of its efforts to revive flagging economic activity.
The prime rate for loans over five years, on which many lenders base their mortgage rates, will thus be lowered by 15 points to 4.45%, with the aim of supporting home sales.
‘If it promises to intensify its support measures, the BPC continues to adopt a targeted approach to monetary policy’, regret however the strategists of BofA.
‘For its easing to be truly effective, it would be necessary to put in place generalized measures, such as reductions in key rates, improved access to credit and a devaluation of the currency’, estimates the American bank.
A certain caution should therefore remain in order in the face of the multiple signs of a slowdown in global growth, which have already caused the US equity markets to bend heavily since the start of the week.
With a decline of more than 3% since Monday, the S&P 500 index is heading – barring major surprises – for a seventh consecutive week of decline, its longest weekly series of losses since 2001.
For analysts at Capital Economics, the stock market correction may not have come to an end yet.
‘Certain key indicators, such as the spread between the Libor rate on interbank loans and the OIS interest rate swap or currency swaps, never widened in this way during previous correction phases, in particular at the beginning of 2020 in moment of the appearance of the pandemic or during the financial crisis of 2007-2008 ‘, recalls the London research office.
For the economic research firm, this suggests that the S&P 500 could not find a floor before the threshold of 3750 points, or even a little lower.
The slight jump posted this Friday following the initiative of the Chinese central bank nevertheless shows that operators remain on the lookout for the slightest positive information to return to the markets and avoid missing a possible rebound.
As such, this bargain-hunting movement should especially benefit the big names in technology, such as Apple or Amazon, all expected to rebound after their tumble in recent months.
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