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Wall Street closed higher ahead of key US election

Wall Street closed higher ahead of key US election

For their part, the main technology companies, such as Apple, Amazon, Tesla, AMD or Nvidia, operated mixed.

The focus of attention is above all on inflation, expectations point to the report finally showing a slowdown from 8.3% in September to 8% in October, moving away from the maximum indicator reached in June of 9.1%.

If the beginning of a possible cooling of inflation materializes, the Fed would have less pressure and could lower the accelerator to aggressive rate hikes, which could return optimism to the market.

At the same time, The debate is growing between the possibility of a recession in the United States, or that it’s just a slowdown in the economy.

All three major US indices are in bearish territory, from their previous record closing highs. The S&P 500 has lost almost 20.7% so far this year due to concerns that an aggressive tightening of monetary policy could push the economy into recession.

The mid-term elections: the key for the markets

The market is also attentive to the midterm elections tomorrow, Tuesday, since it will determine which political party will have control of the agenda in Congress.. Investors tend to prefer that the president’s party does not have a majority in Congress, since the stalemates that are generated prevent the execution of new regulations.

Historically, a split between the Executive and Congress has meant above-average gains.

Now the impetus is given by forecasts that the Republicans will take control of Congress and stop the plans of Joe Biden and the Democrats that have pushed the economy into a recession with the worst inflation in the United States in the last five decades.

“Under this scenario of election results, we doubt that we will make any material changes to our forecasts for GDP growth, inflation or the fed funds rate as a result of the election,” Wells Fargo economists said.

Source: Ambito

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