After hitting record indices on Friday, the Dow Jones fell 0.3% on average, while the S&P 500 lost 0.1%. Meanwhile, the Nasdaq, strongly influenced by technology, rose 0.2%. Texas Crude Down 2.6%.
Wall Street closed in mixed terrain this Monday. The Dow Jones Industrials' leading indicator fell 0.30 % in a weak start to the week and focused on the epidemiological situation.
According to data at the close of operations on the New York Stock Exchange, the Dow Jones cut 106.66 points and stood at 35,101.85 units, while the S&P 500 lost 0.09% or 4.17 points 4,432, 35. The Nasdaq composite index, which brings together the leading technology companies, advanced 0.16% or 24.42 points instead of 14,860.18.
The New York stock market fell from the all-time highs on Friday, given the rebound in COVID-19 cases due to the spread of the delta variant, which mainly affected the energy sector.
That was the most affected with a decrease of 1.48%, coinciding with the bad streak that the oil market has been going through for a week, which today fell below $ 67 a barrel. The real estate (-0.42%), industrial (-0.4%) and technology (-0.35%) sectors also fell .
In green, the healthcare companies (0.38%) and essential goods companies (0.32%) remained.
Wall Street is pending this week for new inflation data that, added to last week's employment data, could determine when the Federal Reserve begins to withdraw its monetary stimulus.
Texas oil falls 2.6% and closes at 66.48 dollars a barrel.
The price of intermediate oil of texas (WTI) closed this Monday with a drop of 2.6%, to 66.48 dollars a barrel, amid concerns about the spread of the Delta variant.
At the end of trading on the New York Mercantile Exchange (Nymex), WTI futures contracts for September delivery were down $ 1.80 from the previous close.
The U.S. benchmark oil lengthened the slump that made it lose 7% in the whole of last week due to the worsening of the epidemiological situation in the U.S. and China.
Concern about the impact on demand in the energy sector was prevalent after the U.S. posted an unexpected weekly increase in domestic crude inventories.
This Monday, new data were influencing the market that points to a slowdown in exports in China in July. In recent days, the Asian giant has imposed restrictions on transport and selective confinements where cases have been detected.
Craig Erlam, an analyst at Oanda firm, said that with more cases of delta variants being seen in many countries, it is difficult to estimate the global economic impact, especially given the degree of success with the vaccine and the different attitudes. ۔
On the other hand, the potential impact of an increase in demand on demand will come as OPEC, and its allies continue to tap production months after implementing the austerity policy in April 2020.
The Fed analyzes changing the trend.
Two Federal Reserve officials said Monday that the U.S. economy is increasing. While the labor market still has room for improvement, inflation is already at a level that could meet a key test stage for the start of interest rate hikes.
Raphael Bostic, head of the Atlanta Fed, said he was looking at the fourth quarter to start a gradual decline in bond purchases or even earlier if the labor market improves.
Additionally, Bostic and Richmond Fed Chairman Tom Barkin said they believe inflation has already reached the 2% threshold, based on their separate assessments. That is one of the two requirements that must be met before increases in the cost of borrowing can be considered.
His comments signify that Fed officials are having discussions about how and when to cut back on their asset purchases. He is getting more details in his discussion on what will be needed to meet the Fed's inflation target under the new framework.
Bostic, which had already indicated the end of the 2022 period for the start of the rises in the cost of borrowing, The Basic Personal Consumption Expenditure Index, or basic PCE, highlighted the five-year annual average for inflation it calculated to reach 2% in May.
There are many reasons to think that we could be on that goal right now," Bostic told reporters. But he assured that the committee that sets monetary policy has yet to agree on the metrics it will use to measure that progress, which central bank authorities will need to discuss.
Barkin said the high inflation seen this year could have satisfied one of the central bank's critical benchmarks for raising rates. However, there is still room for the job market to improve before increasing the cost of credit.
Based on the Fed's current stance for its monetary policy, the benchmark rate will increase When inflation reaches 2, which I think can be argued that it has already done so, and it looks like it will stay there, Barkin told the Roanoke Regional Chamber in Virginia. Said off-commerce before.
His remarks echoed those made in July by St. Louis Fed Chairman James Bullard, who said the current pace of inflation, 3.5% a year by the Fed's preferred measure, is far behind. Above the 2% target and, in their view, it is adequate to compensate for past price weakness, as required by the new central bank guidance framework.
According to Bostic, with the high levels of inflation achieved during the pandemic, the Fed has effectively attained the goal of "additional substantial progress" to advance prices. He said more progress is still needed in the labor market, but that goal could be achieved after another month or two of solid job growth.
Bostic said that puts the Fed on track to start cutting bond purchases between October and December, or earlier if August job gains are more substantial than expected.
Barkin did not specify a timeline for when the Fed can start reducing its asset purchases but said it is looking at the employment-to-population ratio to assess whether the labor market has made sufficient progress toward the Fed's targets.
Regarding how to structure such a reduction, Bostic commented that he supports a " balanced " approach to slowing asset purchases that reduce mortgage-backed and Treasury securities at the same rate and that he would be in favor of cutting purchases over some time. shorter than previously done. " I'm in favor of going relatively fast," Bostic said.