The bounce came. After harvesting the largest weekly decline in ten years and the worst Christmas Eve in its history, Wall Street rose yesterday strongly. Boosted by the retail sector and the big technology, the Dow Jones rebounded to the closure of Wall Street 4.98%, recovered more than the psychological level of 22,000 points, up to 22,848.75, in a day marked by the closing of the European stock exchanges. Since 2009 there has not been an increase of this magnitude. In points, the New York market added 1,086, the biggest climb in its history.
Green dominated the trading session from start to finish. Nothing else to begin, the Dow Jones took off with gains of 0.82%, a result that extended to half session, when it was unmarked with a rebound of 3%. The composite index of the Nasdaq market, where the main technological groups are quoted, presented an even better result. At the end of the session, this indicator increased by 6.16%, to 6,262.77 points.
The respite coincided with a rapprochement between the Trump Administration and the Federal Reserve (Fed). And it is that yesterday the director of the Council of Economic Advisors (CEA, acronym in English) of the Government of the USA, Kevin Hassett, he lowered the tension of the last days affirming that the position of the head of the Federal Reserve (Fed), Jerome Powell, is not in danger.
"Yes, of course, one hundred percent," said Hassett after being asked by the local media about the permanence of Powell at the head of the central bank. The clear response represented a boost for the Fed president, whose expansive policy had been Hardly questioned by Donald Trump. Without going any further, on Monday, the American president criticized the central bank's recent decision to raise interest rates for the fourth time in 2018, arguing that the Fed "is raising interest rates too quickly" and is "the only problem »What does the American economy have?
It has not been the only statement that has burdened the market in the last hours. On Sunday, the Secretary of the Treasury, Steven Mnuchin, said in his Twitter account that he had met with the CEOs of the main US banks and that they all "confirmed that there is sufficient liquidity to grant loans to the consumer and business markets." The message, far from calming the stock market, aroused the doubts of investors.
Yesterday, all these doubts dissipated. And it is that the truce between the Government and the Federal Reserve was added, in the strictly economic sphere, the publication of the Mastercard SpendingPulse report, which points to a record collection during the Christmas campaign. Specifically, the text states that retail sales in the United States during the last holiday period, which runs from November 1 to December 24, exceeded 850,000 million dollars (745,194 million euros), a figure that represents a annual growth of 5.1%, the largest increase since 2012.
End of cycle
The statistics motivated a strong rebound of companies dedicated to the "retail" as Amazon, which rose 9.45%. And, what is more important, it dissipated the doubts about the progress of the North American economy.
And it is that there are already several economists who have predicted that the United States is reaching the end of the economic cycle and that, therefore, the most foreseeable thing is that in 2019 it enters recession. These warning messages had conditioned the behavior of Wall Street in recent months: since October, the Dow Jones has been close to 10%.
The rate hikes undertaken by the Fed Reserve and the virulent reaction that they had generated in the White House had increased the volatility of the market in the last sessions. Not only from the American, but also from the European and Asian indices. Yesterday, the Tokyo Stock Exchange, which had fallen 5% on Christmas Eve (the worst fall of the last two years), anticipated the rebound of Wall Street and closed with a rise of 0.9% to 19,327 points. The second indicator, the Topix, gained 15.92 points, 1.12%, to 1,431.47 units.