International investors remain jubilant after stocks posted their second day of gains this week. The Dow Jones rose more than 1,500 points and the S&P 500 posted its best two-day gain since early 2020. The main key catalyst today was hope among investors that global monetary policymakers are considering a shift to a less aggressive hardening.
At the close of the day on Tuesday, the Dow Jones closed with an increase of 2.80%, reaching a level of 30,316.32 points, its best intraday performance in five months. The S&P 500 ended with a price of 3,790.93 units and a positive variation of 3.06%, while the Nasdaq rose 3.34% to end at 11,176.41 points. Both indices posted strong gains not seen since June 24 this year.
“Investors will be particularly interested in this latest reading on labor market conditions given the implications for Fed policy. We think the sweet spot for markets would be continued job creation that can support spending and consumer confidence, while wage growth and labor shortages are softened to help reduce pressures on consumer prices,” said analysts at consultancy Edward Jones.
In Mexico, the S&P/BMV IPC ended at 46,046.58 points and an increase of 1.36%, while the FTSE BIVA closed up 1.21% with 958.06 units.
Global equities also responded with gains, with particularly positive movement in European markets and technology stocks such as Twitter and Tesla. Cyclicals led the way today, with small caps, consumer discretionary, financial services, industrials and energy all outperforming, in keeping with a more upbeat tone.
The specialists indicated that in general this is a welcome and reasonable rebound in the actions, since the markets seemed too oppressed in the middle of the fall of the last weeks.
“The fourth quarter of the year begins with an upward trend, in which investors show a greater appetite for risk derived from the expectation that the Fed’s monetary tightening will end shortly. This expectation arises mainly from Credit Suisse’s debt situation, in which certain investors consider that this would be the impact of the rate hike on the rest of the sector, as well as the position of the Central Bank of Australia to maintain a more dovish tone. ¨, cutting the streak of continuous rate hikes of 50 base points”, added Moisés Romano, an analyst at Masari, in a report.
However, the president of the Federal Reserve Bank of San Francisco, Mary Daly and other representatives, said that the entity must raise interest rates again and maintain restrictive policies until they reduce inflation to the 2% target of the fed
Bitcoin returns to $20,000
The cryptocurrency registered an increase of 3.78% compared to the close of Monday with a price of 20,307 dollars per bitcoin, its highest price in 15 days. The risk rally from October continues and is buoying cryptocurrencies as investors turn bullish and peak rates are behind us.
“Bitcoin now above the $20,000 level is good news for the cryptoverse. Still below the $1 trillion market cap, cryptocurrencies are making a strong move here and that could continue if risk appetite remains healthy,” noted Edward Moya, analyst at OANDA.