EconomyThe Fed's decision injects fear into the Mexican and...

The Fed's decision injects fear into the Mexican and United States stock markets

The main local indicators closed this week short, as it is a holiday on Friday for Independence Day, lower due to the uncertainty generated by the Federal Reserve’s monetary policy decision, which will make its announcement next Wednesday, September 21 , where rates are expected to increase by up to 100 basis points, after the August inflation data was released, which posted its second month of decline.

The main indicator of the Mexican Stock Exchange (BMV) closed at 46,701.72 points, a drop of 0.58% compared to the previous Friday, while the FTSE BIVA of the Institutional Stock Exchange (BIVA) fell 0.29% in the same period to end at 973.39 units.

“The (Thursday) session was characterized by an increase in speculation around the Federal Reserve’s monetary policy decision, which led the US dollar to strengthen and Treasury bond yields to rise. The market expects more restrictive language from the Fed in its announcement on September 21, there is even the possibility that they will increase the rate by 100 basis points,” said Gabriela Siller, director of economic analysis at Banco Base.

The main indices in New York are heading to end the week with significant declines, since the Dow Jones ended the day with a fall of 0.56%, reaching a level of 30,961.82 units, which would mean a drop of 3.70% compared to Friday September nine. In the same sense, the Standard & Poor’s 500 (S&P 500) and the Nasdaq presented this Thursday with a decline of 1.13 and 1.43%, while so far they fall weekly 4.08 and 4.62%, respectively.

The specialists mentioned that the markets in general remain fearful that the Fed will push the market beyond its limits next week, with a third consecutive rate hike of 75 basis points and a small possibility of a move of 100 basis points to deal with. to curb inflation.

“We noted during the summer rally that it seemed to us that the markets had become overly optimistic about the prospects of the Fed backing away from short-term rate hikes. The latest inflation report prompted a sharp repricing in equity and bond markets to reflect an anticipated higher spike in the Fed’s policy rate, but for us, the broader investment backdrop remains the same. , said analysts at the consulting firm Edward Jones.

The most famous cryptocurrency in the world ended this Thursday at a price of 19,846.7 dollars per Bitcoin, which would mean a decrease so far this week of 5.8% and in the year of 57.2%.

Oil scores its third week down

International oil prices are heading to close their third week of falls, because the expectation of lower demand is increasing every time given the possibility that the global economy will slow down or even fall into recession. In addition to the possibility that the Federal Reserve will show more restrictive language, since at higher rates, the opportunity costs of holding investments in non-interest-bearing commodities are reduced.

The West Texas Intermediate (WTI) fell 3.64% this Thursday, being at a price of 85.26 dollars per barrel, while so far this week it already shows a decrease of 1.76%, which would be its third week with the same trend, accumulating a drop of 8.4% in that period.

For Brent, the price this Thursday stood at 90.96 dollars per barrel with an intraday drop of 3.34% and a negative variation of 2.02% so far this week, following the same trend of its US pair, with a accumulated drop of 8.1%.

“Crude prices fell again as fears about demand intensified after a series of economic data showed that the US economy is slowing. Oil fundamentals remain mostly bearish as China’s demand outlook remains a big question mark and the inflation-fighting Fed appears poised to weaken the US economy,” said Edward Moya, Senior Analyst. of market for the Americas in OANDA.

For its part, gold closed the session with losses, trading at 1,663.8 dollars per ounce, falling 1.98%, and touched a minimum of 1,660.5 dollars per ounce, not seen since April 21, 2020. In the weekly accumulated, gold loses 3.09%. On the other hand, agricultural commodities closed the session with losses, after the government of President Joe Biden reached a tentative agreement on Thursday to avoid a railway strike, for which corn and soybeans lost 0.84 and 0.27%, respectively, trading at 6.76 and 14.51 dollars per bushel, while wheat fell 3.24%.

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