Wall Street indices prolong their falls after a week of declines
Wall Street closed the week with moderate losses after the falls caused by the annual inflation data for April, which stood at 4.2%, the highest recorded since 2008, and that the stock market could not compensate despite the rebound registered in the last two days. The New York Stock Exchange had its most bearish week since February.
The Consumer Price Index (CPI) in the United States rose 0.8% in April and has placed year-on-year inflation at 4.2%, the highest registered since 2008, with which the worries about the takeoff of inflation in the first world economy grow.
The figures, higher than economists’ forecasts of 3.6%, generated strong movements in the debt market, raising the yield of the US 10-year Treasury bond to 1,695% after several weeks of stabilization.
This faster, stronger-than-anticipated rise in U.S. inflation scared Wall Street on Wednesday, which intensified share sales amid fears that the Federal Reserve (Fed) could prematurely initiate the withdrawal of monetary stimulus.
Experts have considered that the rise of eight tenths in consumer prices in April is one more sign that the economic reopening in the US is generating strong demand that supply is not able to absorb, especially for goods and services, and they look at now to the central bank.
Investors are also concerned that a rise in commodity prices could affect profit margins, and they withdrew their capital, especially from companies that grew the fastest in the past year.
However, the fears seemed to fade on Thursday and Friday, after several Fed officials assured that the central bank has no plans to end the incentives.
For him Head of Market Strategy at Canaccord GenuityTony Dwyer, the drop this week is a good sign. “There needs to be a correction in the summer that is significant enough to eliminate the condition of extreme overstocking in the medium term and excess optimism,” he was quoted as saying by CNBC.
The barrel of Brent, a benchmark in Europe, recorded a rise of 2.39% to 68.48 dollars per barrel, while West Texas rose 2.33% to 65.11 dollars per barrel. The euro is trading flat against the dollar and is traded at 1.2147 ‘greenbacks’. The 10-year US bond falls with a return of 1.63%.