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Wall Street anticipates falls amid a new spike in bond yields

DOW JONES futures fell 1.05% to 33,956.10, S&P 500 futures lost 1.22% to 4,292.60 and Nasdaq futures fell 1.44% to 14,463.40. Investors continue to scrutinize inflationary pressures, especially on commodities such as oil.

Yesterday’s gains on Wall Street could turn into losses in today’s session, if we look at how the futures of the main indices of the American stock market move at this time. Specifically, DOW JONES futures fell 1.05% to 33,956.10, S&P 500 futures dropped 1.22% over 4,292.60 and Nasdaq futures dropped 1.44% over 14,463, 40.

And, despite yesterday’s increases, the reality is that factors such as high inflation, the problems facing the Chinese real estate sector or the risk that the US Congress will not reach an agreement in time to increase the Debt ceilings continue to weigh on investor sentiment. To all this must be added a new upturn in the yield of the American 10-year bond , which rises to 1.54% and once again hurts the valuation of the technology sector in the long term.

As for the tug of war on the issue of American debt, the US president said Tuesday that his fellow Democrats could make an exception to a Senate rule to allow them to expand the federal government’s borrowing authority without the help of Republicans. , which could avoid a debt default.

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On the inflation side, Janet Yellen, from the US Treasury Secretary , says that “the rise in prices is temporary, but it does not mean that it will disappear in the coming months. She trusted the Federal Reserve and in making the right decisions. It is up to Joe Biden to determine whether Jerome Powell is re-elected a second term as chairman of the Federal Reserve. I am in favor of a bipartisan agreement on the debt ceiling. ”

Charles Evans, president of the Chicago Fed , assures that “inflation this year will be between 3.5% and 4%, which will be a problem, but of monetary policy. The bottlenecks have been a real challenge. I am comfortable with the idea that high prices will fall once the supply problems have been fixed. If the economy continues to grow I would not be surprised if the tapering completed in mid-2022 or in the fall. I think unemployment will fall below the 5% by the end of 2021. It will be around 3.5% or 3.7%.

House prices in the US hit a new record again in July for the fourth month in a row. The US house price registered a year-on-year rise of + 19.7% in July, breaking the record for the average percentage increase for the fourth consecutive month, according to data from the S&P Corelogic Case-Shiller index. Such high records have not been seen since 1988, where Phoenix (+ 32.4%), San Diego (+ 27.8%) and Seattle (+ 25.5%) recorded the highest price increases.

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On the other hand, the global energy crisis, labor shortages and other supply chain constraints have weighed down the global economy’s recovery as major central banks are considering easing the massive stimulus of the era. pandemic.

US economic data

ISM Non-Manufacturing PMI (September): 61.9 vs. 60.0 expected and vs. 61.7 prior.
ISM index of non-manufacturing sector activity (September): 62.3 vs 59.5 expected and vs 60.1 previously.
ISM employment index in the non-manufacturing sector (September): 53.0 vs. 53.7 previously.
ISM index of new orders in the non-manufacturing sector (September): 63.5 vs 63.2 previously.
Markit Composite PMI (September): 55.0 vs 54.5 expected and vs 55.4 prior.
Services PMI (September): 54.9 vs 54.4 expected and vs 55.1 previously.
Trade Balance (August): -73.30 bn $ vs -70.50 bn $ expected and vs -70.30 bn $ previously.
Today, the market awaits the publication of the employment data of the ADP consultancy , corresponding to the month of September, considered a leading indicator of the Employment Report that will be published in the US this Friday .

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Petroleum

OPEC + decided to keep intact its plan to increase production at 400,000 b / d per month. With 39.6 M b / d forecast for November, OPEC + has increased its production by 3 M b / d since January. Meanwhile, demand is expected to recover by around 6M b / d in 2021 (after a 10M b / d drop in 2020). OECD industry stocks are declining by around 30 million barrels a month and the most recent data shows that US crude oil inventories are stable since July. However, 2022 could be a year of great challenges. While demand is expected to improve by 3-4M b / d, supply will also increase.

At this time, the futures of the barrel of Brent oil are trading up 1.18% to $ 82.22, while West Texas is down -0.61% to $ 78.45.

The bitcoin, meanwhile, continues shot and exceeds $ 51,000. Specifically, increases of 2.62% to 51,315.6 dollars.

The euro is trading slightly down against the dollar by 0.50%, to 1.1538 greenbacks.

 

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