New York.- Wall Street closed this Wednesday with solid advances in its three main indicators, which in the case of the industrial Dow Jones was 2.21%, in a day marked by encouraging advances in the investigation of the coronavirus.

The good session on Wednesday means that the S&P could mark its best month since 1974, since for the moment, since April 1 it accumulates an increase of more than 13%. For its part, the Dow is also on track to register the best month since 1987, having advanced 12.4% so far in April.

At the end of operations on the New York Stock Exchange, the Dow Jones rose promoted by large financial companies such as American Express (8.95%) or Visa (6.18%) and the energy sector, led by Exxon Mobil (5.51%) and Chevron ( 5.25%). The selective S&P 500 climbed 2.66% and the Nasdaq composite market index, which brings together the main technology companies, advanced 3.57%.

The price of Texas intermediate oil (WTI) rebounded up 22.04% and closed this Wednesday at 15.06 dollars a barrel, in a day marked by investor confidence that world economies reopened earlier than expected after the scourge of the coronavirus pandemic, as well as less accumulation than expected in US inventories.

Oil prices soared more than 22% on Wednesday after data showed less-than-expected buildup in US inventories, as well as investor hopes that economies would reopen earlier than expected.

Optimism that economies may reopen sooner than scheduled increased after Gilead said that the first results of its coronavirus drug trial showed that at least 50% of patients treated with one dose over five days improved and more. half were discharged from the hospital within two weeks.

All this despite a decrease of 4.8% of GDP in the United States in the first quarter, the largest economic contraction in the country since the financial crisis.

Federal Reserve asks Congress for more fiscal aid in the face of an “unprecedented” crisis

At noon the President of the Federal Reserve (Fed), Jerome Powell, announced on Wednesday that economic activity in the United States “will fall at an unprecedented rate” in the second quarter of 2020, warning of the “seriousness” of the crisis unleashed by the coronavirus pandemic.

“It is clear that the effects on the economy are serious … Economic activity will probably fall at an unprecedented rate in the second quarter of the year,” Powell explained at a press conference after the monetary meeting in which he left without interest rates changes in the range of 0.25% to 0%.

In his appearance, he stressed the Fed’s willingness “to use all available tools to support the United States economy in these challenging times.” The Fed has launched its entire monetary arsenal with unlimited and massive purchases of bonds and assets, as well as several injections of liquidity, to keep the financial system operating amid mounting tensions over the coronavirus.

So far, these measures exceed $ 3 trillion, but Powell insisted on his intention to continue supporting the economy wherever possible. However, he sent a message about the limits of monetary policy and the need for Congress to increase the fiscal stimulus launched so far.

“I want to emphasize that the Fed’s powers are lending, they are not spending powers. Getting a loan that may be difficult to pay may not be the solution … direct fiscal support may be necessary,” he added. For this reason, he warned that “the severity of the recession will depend on the political actions taken at all levels of government.”

The words of the Fed president come hours after the first calculation of the evolution of gross domestic product (GDP) was released between January and March.

The US economy contracted at an annual rate of 4.8% in the first quarter of 2020 due to the effects of the coronavirus pandemic, the biggest drop since the last quarter of 2008, with the outbreak of the financial crisis that caused the Great Recession, in which the economy decreased at an annual rate of 8.4%.

“Low interest rates are likely to persist for at least the next two years, long after the immediate threat from the virus has dissipated,” said Lauren Goodwin, an economist at investment fund New York Life Investments in a note to clients.

The United States, which already registers one million case cases and almost 60,000 deaths, is preparing for a recession not seen since the 1930s due to the economic activity paralysis due to the pandemic. In recent weeks, more than 26 million people have applied for unemployment benefits in the country.

For now, the US Congress has already approved four economic bailout packages worth nearly an additional $ 3 trillion, including direct cash transfers to citizens and subsidies to small and medium-sized businesses.

“We are putting an unprecedented amount of fiscal aid into the economy. Billions of dollars are going to be seen in the economy and I think this is going to have a significant impact,” said Steven Mnuchin, the Treasury secretary, on Sunday.

However, Republican leaders, with a majority in the Senate, have expressed their refusal to support state and economic authorities in distress to avoid fattening the country’s already heavy debt. The next Fed meeting will take place on June 9-10, where it will present its new macroeconomic projections.