Wall Street corrects again before market on Monday…
(Boursier.com) — Wall Street corrected again before the market on Monday, after an already brutal purge at the end of last week (-1.62% on Friday on the DJIA and -1.8% on the Nasdaq). The S&P 500 lost 1% in pre-session today, the Dow Jones 0.9% and the Nasdaq 0.8%. A barrel of WTI crude fell 0.5% to $78.4. An ounce of gold lost 0.3% to $1,650. The dollar index advanced 0.3% against a basket of currencies.
On the economic front in the United States today, the Chicago Fed National Activity Index for August will be revealed at 2:30 p.m. (consensus 0.25 according to FactSet, versus 0.27 a month before). The Dallas Fed manufacturing index for September will be released at 4:30 p.m. (consensus -5).
Elsewhere in the world, Japan’s Markit/JMMA Preliminary Manufacturing PMI came in line with expectations at 51 for September. The German Ifo business climate indicator for September came in at 84.3, well below the FactSet consensus of 87 and down sharply from 88.6 in September. ‘august.
Finally, the day would be cruelly incomplete without a bit of ‘fedspeak’. Loretta Mester, President of the Cleveland Fed, will speak during the day. It will no doubt be able to remind the financial markets, already plunged into depression, of the Fed’s firm commitment to bring down inflation, at the cost of additional economic suffering.
According to the real-time FedWatch tool, the current probability of further Fed monetary tightening of 75 basis points on Nov. 2 after the next monetary meeting is nearly 74%, which would bring the range of the fed funds rate between 3.75 and 4%. The probability of a slightly less vigorous move of 50 basis points is 26%. The Fed raised rates between 3 and 3.25% last week, raised by 75 basis points for the third consecutive time, the first time since Paul Volcker. The monetary tornado should therefore continue, Jerome Powell himself having affirmed the determination of the Fed to “finish the job”, despite the major risk of recession.