“While it hasn’t reached the danger zone levels that typically precede a bear market (a drop of at least 20%), it has reached levels that are typically consistent with corrections and relatively low returns over the next one and five years,” the US investment bank said on Wednesday.
The Actions US stocks fell on Tuesday, racking up nearly 9% losses so far this month, as uncertainty surrounding an increasingly hawkish Federal Reserve and rising geopolitical tensions caused investors to dump stocks. high-flying technology.
Goldman Sachs said markets are in a corrective phase of a bull market cycle and current levels mean relatively low returns over the next one to five years.
Stocks in New York had another day of high volatility yesterday, ahead of the Fed’s decision (FED) on a new monetary policy, with falls in all stock market averages, in the framework of the balance sheet presentation season.
The industrial average fell 0.2%, the expanded S&P 500 index fell 1.2% while the Nasdaq technology indicator fell 2.3%, according to data provided by the New York Stock Exchange (NYSE).
Investors expect a new much more aggressive monetary policy by the Fed to put an end to the inflationary escalation, the highest in 40 years.
The agency is expected to signal a rate hike starting in March and tougher policies on the table to deal with high inflation.
The pandemic continues to be an obstacle for the economy, to the point that today the International Monetary Fund (IMF) cited the Omicron variant as the reason why it lowered its forecast for world economic growth to 2.4% for this year.
A potential conflict between Russia and the West over Ukraine threatens to drive up energy prices further and force more countries to focus on waging war, rather than inflation and COVID-19.
Banks and energy stocks were the sectors that benefited most from the current environment.
The 10-year Treasury bond yield rose to 1.78%. Bank of America and Citigroup gained about 2% each. Occidental Petroleum and APA Corp rose more than 8%.
American Express, IBM and Chevron were among the top gainers on the Dow Jones after reporting quarterly results.
Meanwhile, futures contracts related to the VIX volatility index indicate that investors are bracing for a high level of ups and downs in the short term.
Tech stocks again led losses as investors worry about rising interest rates that tend to make tech stocks less attractive.
Microsoft fell 2.7% before publishing its earnings report that came after the close. Revenue was up 20% in the final quarter of 2021, according to a company statement, compared to nearly 22% growth in the previous quarter. Microsoft’s net income reached 18.77 billion dollars.
The best of the Dow Jones was for American Express +8.9%, IBM +5.7% and Chevron +4.3%.
In the S&P 500, APA +8.3%, Occidental +8.1% and Halliburton +7% stood out.
On the Nasdaq, the best was NetEase +3.5%, Paccar +3% and Baidu +1.3%.
In Europe, stock markets recovered from the heavy losses of the day before and put aside fears of the conflict in Ukraine and the effects of the pandemic.
In any case, investors are attentive to the Fed’s decision tomorrow and its consequences on monetary policy.
The highlight was Ericsson, which gained almost 8% after beating expectations for fourth-quarter earnings, boosted by high demand for 5G network equipment.
Swiss software maker Logitech also stood out, rising 6% after beating expectations for quarterly sales and raising its outlook for the full year.
In the leading Euro Stoxx 50 index, which gained 0.6%, the rises of the Dutch Philips +4%, the French BNP Paribas +3.3% and the Italian ENI +3.2% stood out.
In London, the FTSE rose 1% and the MIB in Milan rose 0.2% while the DAX in Frankfurt, the CAC 40 in Paris and the IBEX 35 advanced 0.7%.
Source From: Ambito
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