Wall Street continues climbing: the S&P 500 beats another record, but Dow Jones has a hard time exceeding its maximum

Wall street again opt for green on Tuesday, but not in all indexes. The fear of the Chinese coronavirus decreases in equities, so much so that the Dow Jones has touched 29,400 points throughout the day, then deflated and closed flat at 29,276.34 points. So far this year, the indicator revalued 2.6%. For its part, the S&P 500 rebounds 0.17%, reaching 3,357.75 integers and marks a new all-time high. So far this year, it gains 3.9%. Meanwhile, the Nasdaq 100 closes flat, but positive, and scores 9,517.86 points.

The New York Stock Exchange pulls muscle one more day, practically routinely overcoming its own highs of all time. And is that US equities are in a “indomitable free climb“insists Joan Cabrero, director of strategy for Ecotrader.

However, the fact that during the day the Dow Jones touches the 29,400 and then descend, “could be temporary but should be monitored, since this usually warns that bullish control is not absolute and warn us of an impending consolidation in the North American market. ”

This expert explains that in order to talk about “a buyer burnout” on the other side of the Atlantic, the Nasdaq 100 must descend under the 9,130 ​​points, where its upward guideline runs.

For this, the technological selective must lose about 4% from its current levels. Yesterday, for the first time, it exceeded 9,500 integers at the close of a session.

Don't panic …

The new coronavirus has already caused the death of more than 1,000 people and the number of infected exceeds 40,000, according to the latest data update made today by the National Health Commission of China.

This disease has been a cause for concern over recent weeks in the markets for its potential impact on the economy of the Asian giant, the world's second largest, and global power.

On the other hand, optimism has increased in recent days regarding the coronavirus. Unigestion experts stress that it is still “impossible” to predict the impact. In addition, as Link Securities analysts explain in their daily report, investors are 'betting' that “the People's Bank of China (the country's central bank) will take new measures to stimulate the economy throughout this week.” Asian giant

Likewise, the Department of Income Analysis 4 highlights that the increase in the number of infected people remains stable For the new virus. This peak is expected to peak between mid and late this month.

… but Powell warns of “disturbances”

However, caution does not evaporate. The president of the Federal Reserve of the United States (Fed, central bank of the country) has warned today that the coronavirus can cause “disturbances” in the world economy.

Jerome Powell has appeared today before the Financial Services Committee of the House of Representatives, the lower house of the US parliament. As usual, tomorrow he will do the same in the Senate. The 'leader' of the Fed visits the US Congress twice a year.

In his speech today (which is the same as Wednesday's in the Upper House), he has assured that the central bank “closely” monitors the emergence of the coronavirus because, he said, “it could generate disturbances in China that would extend to the rest of the global economy. ”

In addition, Powell has ensured that “the current position of monetary policy” will be maintained, with interest rates at 1.50% -1.75%, as long as “the information that comes about the economy (from the US) ) stay in line with the prospects. “

The president of the Fed has also warned that despite the fact that “it is encouraging that productivity growth, the main engine to increase wages and long-term living standards, has risen recently, productivity gains have been deficient in all this economic expansion. “

Given these words, the president of the United States, Donald Trump, whose criticisms of Jerome Powell and the Federal Reserve are common, has presumed through Twitter that the situation of the US economy is “the best in its history.”

The Trump Executive presented in Congress yesterday the budget for the fiscal year 2021, with which, among other things, he intends to increase military spending.

Oil picks up while Russia decides what to do

Oil futures Brent They rise this Tuesday to the area of $ 53.9 per barrel, which represents a 1.3% rebound compared to Monday. So far this year, the reference crude in Europe loses about 18.3%.

Russia has not yet issued a answer on whether you accept or reject the proposal of Saudi Arabia to cut production further, by about 600,000 barrels per day. “Russia is closely monitoring the effects of the spread of the coronavirus on world energy markets,” said Alexander Novak, Russian Energy Minister, according to Bloomberg.

The experts of the OPEC technical committee recommended last week a total cut of 2.1 million of barrels per day to cope with the fall in demand and try to raise the price of crude.

For its part, the futures of West texas up a slight 0.4%, to the area of $ 49.8 per barrel. In the first weeks of 2020, US crude accumulates losses of 18.5%.

And today it has been announced that the Chinese petrochemical company Hengli Petrochemical has lowered its oil processing rate to 90% this week, at the refinery in the northeast of the country. The company would have been producing at 109% until the outbreak of coronavirus has reduced demand, as explained by Reuters. The cuts would be equivalent to about 76,000 barrels less per day.

The euro brushes its lows of the last year

The European currency is trading at around $ 1,092, with hardly any changes with Monday's session; but it is less than 0.3% of $ 1,089, which was the lowest level for the euro in its cross against the dollar last year. He fell to that level on September 30. So far this year, the euro depreciates 2.6% against the US banknote.

For its part, the pound sterling rebounds a slight 0.2% compared to the previous day and reaches the area of ​​the 1,186 euros. So far this year, it advances around 0.3%.

As for metals, gold slows its rise this Tuesday. The refuge It yields 0.5% compared to Monday's close and drops to the level of $ 1,566 per ounce. So far this year, the metal revalued 3%.

Some analysts estimate that confidence in the good progress of the US economy will limit the demand for metal, report from Bloomberg. In turn, the low yields of bonds worldwide make gold a more desirable investment.

“Low returns tend to support gold, making investors less likely to lose higher than real returns,” they say from the financial information agency. Analysts are waiting to know data from inflation, retail sales and industrial production during the week.

For readers who want more: Ecotrader, the investment strategy portal of elEconomista.es

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