Stock markets chain another day of declines after the Fed’s warning, which the banks celebrate

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ALEJANDRA OLCESE

Updated on Thursday, 6 January 2022 – 19:13

The Ibex 35 has closed almost flat, but stocks in Europe, Asia and the United States have continued to fall. Banks have been the winners of the session

Jerome Powell, Chairman of the US Federal Reserve

The main stock markets in the world have registered this Thursday a second consecutive day of falls after the minutes of the last meeting of the Federal Reserve of the United States (the Fed), in which they say they see “justified” advance a rise in interest rates by the elevated inflation.

“Based on your individual projections for the economy, labor market, and inflation, you might be justified advance or increase the rate of interest rate hikes with respect to the foregoing, “agreed the institution that presides Jerome powell at their last meeting on December 15, although they did not specify when that rise could begin.

On that date, the governors of the US central bank left interest rates unchanged in the range 0% to 0.25%despite the fact that inflation in the United States had stood at 6.8% in November, its highest rate in the last four decades.

They did make a decision about reduce your debt purchase program, which will be completely finished in the month of March.

According to the minutes of that meeting, the members of the Fed were also in favor of starting to reduce central bank balance sheet once the rate hikes start, something that investors did not have.

“Some participants also indicated that it might be appropriate to start reducing the size of the Federal Reserve’s balance sheet relatively soon once interest rates begin to rise,” the minutes read.

Banks are unmarked from the red numbers

These signs that the Fed will begin to tighten its monetary policy earlier than expected, in the face of a inflation who could be more persistent than it seemed, they have not sat well in the markets despite the fact that they had already assumed that sooner or later the central bank would start raising rates after such a long time of monetary laxity.

Wall street today chain one second day in red, with falls of 0.39% in the Nasdaq at the opening of the session after losing 3.34% on Wednesday. The S&P 500 opened the session with a decline of 0.25%, after having left 1.94% the day before; while the Dow Jones fell 0.38% in the first minutes of trading after falling 1.07% on Wednesday.

Red numbers have also predominated in the Asian parks with decreases of 2.88% in the Nikkei of Tokyo at the close, of 1.13% in the Kospi de Sel and of 0.25% and 0.66% in the two exchanges of mainland China (Shanghai and Shenzhen) . There were also widespread declines across all indices in Southeast Asia. Hong Kong was the exception, with an advance of 0.72%.

In Europe, the session has been marked by falls except in Spain, where the Ibex 35 has managed to recover from the opening drop and closed the day with a minimal setback of the 0.01%.

The closings were negative in the rest of European capitals: the stock market Paris I lost 1.72%; that of London, 0.88%; that of Frankfurt, 1.35%, and that of Milan, 1.8%.

Three Kings Day has been positive for the Bank entities, who have celebrated that the Fed minutes bring closer a rate hike that will be very beneficial for their business models. In Spain, they have led the promotions CaixaBank (+ 4.27%), Sabadell Bank (+ 3.1%) and Bankinter (2.78%).

Outside our borders, the acceleration of Deutsche Bank in Germany (+ 2.53%); BNP (+ 1.36%), Crdit Agricole (+ 1.15%) and Societ Generale (+ 1.86%) in France; Standard Chartered (+ 3.72%), Natwest (+ 2.61%), Lloyds (+ 2.6%) and HSBC (+ 2.12%) in the United Kingdom; and Intesa Sanpaolo (+ 0.62%) in Italy.

The contagion effect was noted in the parks of the old continent despite the fact that, for now, there are no signs that lead to think that the European Central Bank is going to accelerate the tightening of its monetary policy.

The institution that runs Christine Lagarde has already announced a “progressive” withdrawal of stimuli, readjusting debt purchase programs and slowing down the pace of acquisitions, but has not yet spoken of hitting rates.

He believes that inflation is temporary for the moment and watches closely that there is no second round effects that could generate an inflationary spiral.

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