Soft buying on Wall Street with focus on Powell and rate cuts

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Wall Street is trading with soft purchases this Tuesday after the mixed sign Monday, in a session in which technology stocks led the gains and allowed the S&P 500 and to Nasdaq renew historical highs. All this as investors focus their attention on the chairman of the Federal Reserve (Fed), Jerome Powell, and in the monetary policy of the US central bank. The head of the Fed has appeared today before the US Senate to explain the decisions that the organization has taken in interest rate matter and on the evolution of the economy of the country. On this occasion, Powell has assured that The organization needs «more good data» on inflation to be able to initiate interest rate cuts. «The Committee has stated that we do not expect it to be appropriate to lower the target range for the federal funds rate until we have gained greater confidence that inflation is moving sustainably toward 2%. Incoming data for the first quarter of this year did not support that increased confidence. However, The most recent inflation readings have shown some modest progress, and more good data would strengthen our confidence.«, he stressed.


The Fed's next decisions will be determined by the evolution of inflation. Therefore, all eyes are on the June report, which will be released this Thursday. The market expects that Inflation falls to 3.1% in general rate compared to 3.3% in May, while for the underlying variable estimates that remains at 3.4%. «How US inflation developed in June could greatly influence the actions of the country's central bank in terms of monetary policy,» said Link Securities. Therefore, these analysts believe that «the performance of the bond and stock markets will depend on the performance of the US central bank in terms of monetary policy.» The publication of the US CPI for June will be more relevant «what Powell can say before his country's Congress on Tuesday and Wednesday.»


At the business level, the earnings season The third quarter kicks off this Friday with the major US banks kicking off. JP Morgan, Citigroup, Bank of New York Mellon either Wells Fargo will be the first to be held accountable. In other markets, oil West Texas falls by 0.19% ($82.15) and the Brent loses 0.23% ($85.54). For its part, the euro depreciates by 0.05% ($1.0819), and the ounce of gold earns 0.28% ($2,370). In addition, the 10-year US bond yield is revalued at 4.291% and the bitcoin rises 1.65% ($57,272).