Wall Street has closed with notable falls (Dow Jones:-1.18%; S&P500: -0.92%; Nasdaq:-0.84%) this Monday after ending a mixed week in which the doubts with a rate cut of the Federal Reserve (Fed) at its December meeting and the fear of high valuations of artificial intelligence (AI) put downward pressure on the indices. Therefore, facing the next sessions, the market will be very attentive to the results that are announced. Nvidia (Wednesday), as well as macro data that will be published after the reopening of the US Government. «Everyone is wondering if the market is in a bubble that will send the indices crashing like never before.. The problem is that we analyze the market with a metric that has changed. That’s why many don’t see what’s really happening,» says market analyst Manuel Pinto. In this sense, the strategist comments that, since 2019, the S&P 500 has risen more than 150%, «but in terms of gold… it has fallen 27%. That is to say: the correction is already happening, we just don’t see it because we measure with an ‘artificial lens’. If we compare with previous crises, there is still room for the S&P 500 to continue falling against gold. Does that mean the index will go down? Not necessarily.»The United States competes directly with China for global hegemony. The decisive battle of our time will be Artificial Intelligence. To win it, there is only one way: issue more debt to give more capital to AI companies, and lower interest rates to finance their expansion, both results should be positive for technology companies,» adds Pinto. Another factor that keeps investors uneasy is the possibility that, contrary to what the markets had been assuming almost for sure, the Fedin the meeting that will be held at the beginning of December – days 9 and 10 -, its Federal Open Market Committee (FOMC) do not lower your reference interest rates again because you do not have sufficient information to determine the real state of both the labor market and inflation in the US. «We understand that both factors will continue to condition the behavior of the stock markets in the coming weeks, at least until the aforementioned meeting is held,» commented Link Securities. In this sense, the vice president of the Federal Reserve (Fed), Philip Jeffersonhas opted this Monday for an «especially cautious» approach ahead of the December meetingdue to the absence of data in recent weeks caused by the Government closure.
EMPLOYMENT, MACRO PROTAGONIST
From a macro point of view, and after the reopening of the Government, economic data is beginning to see the light in the US. Thus, this Thursday the September official employment reportfor which it is expected show the creation of 50,000 new jobs from 22,000 the previous month. Furthermore, it is anticipated that the unemployment rate will remain stable in 4.3%. «It remains unclear whether the October labor report will be publishedwhich, if so, would leave investors and the Fed without fundamental data when making their decisions,» they point out in Link Securities. The agenda also includes the weekly employment variation prepared by the consulting firm ADP (Tuesday) and which reflects a four-week moving average. On the other hand, on Friday it will be the turn of the Preliminary services and manufacturing PMIs for November and the index of consumer sentiment of the same month prepared by the University of Michigan.
COMPANIES AND OTHER MARKETS
At the business level, the results are gaining strength again this week, with the figures of Nvidia as the main reference for investors at a time of concern about the high valuations of companies associated with AI. «The results will be an important moment of validation of the AI revolution and a positive catalyst for tech stocks heading into year-endas some investors continue to underestimate the magnitude and scope of AI spending,» says Pinto. But retailers like Home Depot (Tuesday), Lowe’s (Wednesday) or Walmart (Thursday) will also be accountable to the market and their numbers will be followed very closely to measure the health of the American consumer. «Consumer spending accounts for about two-thirds of America’s gross domestic product, and in recent years, its resilience has also helped propel the S&P 500 to record after record. What investors need to know now is How long can consumers hold out on the Trump administration’s trade wars?weak employment growth and persistent inflation,» adds this expert. For their part, the shares of Alphabet have risen 3.11% after Berkshire HathawayWarren Buffett’s investment conglomerate, has revealed a stake of 4.3 billion dollars in Google’s parent company.
They have also been in the news Applewho has been sentenced to pay 634 million dollars to Masimo for infringing its blood oxygen monitoring patent, and amazonwhich has returned to the debt market for the first time since 2022 with a issuance of bonds of 12,000 million dollars.
In other markets, oil West Texas has decreased by 0.57% ($59.75) and the Brent has given up 0.54% ($64.04). For his part, the euro It has depreciated 0.27% ($1.1588), and the ounce of gold has lost 1.59% ($4,029). Furthermore, the 10-year American bond yield has relaxed to 4.133% and the bitcoin has decreased by 2.59% ($91,769).
