Trump and the federal pay the Wall Street indicators to record a weekly loss
The wave of recovery in American stocks faded this week after the Federal Reserve President Jerome Powell rejected the idea of intervention to support markets, which angered President Donald Trump, who announced a series of agreements on Thursday.
The S & B 500 has decreased by 1.5% over a period of four days, and reduced its losses after Trump said that there is a commercial agreement expected with the European Union, without providing details or schedule.
The US President was more beautiful about a vital agreement between the United States and Ukraine in the metal sector, noting that the agreement will be signed next week.
The fluctuations ahead of the Friday holiday led to the registration of the “Nasdaq 100” index, which is dominated by the technology sector, a weekly loss of 2.3%.
Trump attacks the head of the federal
Trump attacked the head of the federal reserve on social media, saying that “the dismissal of Powell cannot occur with enough speed,” stressing that the federal should have reduced interest rates this year, or at least he must do so now. Later, Trump told reporters that he was able to dismiss Powell “if he wanted.”
This public criticism came after Powell indicated on Wednesday that he would follow the “waiting and anticipation” approach regarding the impact of the trade war on inflation, disappointed the hopes that were hanging on a rapid intervention to support the markets.
However, these moves were less severe than the previous week, which witnessed great fluctuations in stocks, bonds and dollars, due to Trump’s sudden decisions in commercial policy.
Repeated changes in customs duties policies have undermined confidence in the US dollar, which extended its series of losses for the third week in a row.
Federal independence at stake
In the bond market, US Treasury Bonds returned on Thursday, with weekly gains for government bonds declining. The high oil prices constituted additional pressure, as well as Trump’s criticism of Powell.
Krishna Gaa of Evekor pointed out that the independence of the federal reserve will be a major axis in the coming period, especially with the transfer of customs duties to consumer prices.
He wrote in a memorandum to customers: “It is the federal continuous confidence, amid a decline in the management of the administration, which has drawn the market response so far: real interest rates higher, weaker dollar, the exceptional decline in American stocks, but without panic of inflation or inflationary stagnation.”
Gawa also warned that a case related to the two main organizational bodies independently dismissed by Trump may be an important indication of any possible repercussions on the independence of the federal reserve, adding sarcastically: “If you like the chaos of customs duties in the markets, you will love the scenario of federal loss of independence.”
Various indicators in the economy
UNICE’s unemployment requests fell to the lowest level in two months, in reference to the stability of the labor market, while the Federal Philadelphia index fell, disappointing all expectations, which constitutes an early warning from the manufacturing sector.
The energy sector was one of the best performance sectors this week, after the price of the West Texas crude jumped by more than 5%, in its largest weekly gain this year. Treasury Secretary, Scott Payette, indicated his willingness to take measures aimed at reducing Iran’s oil exports to scratch.
In corporate news, the shares of health insurance companies fell on Thursday, after the United Health Group reduced their annual profits, which pressed the Dow Jones Industrial Index, which decreased by 1%.
Alphabet’s shares also retreated after a federal judge ruled that Google illegally monopolizes some of the markets of digital advertising technology.
On the other hand, the “Eli Lilly & Co” arrow jumped after positive results from a new weight loss medicine, and the “TSMC” TSMC shares in the United States increased after the company, which is the main supplier of “Inviteia” and “Apple”, expected quarterly sales that exceed analysts.
Trade War: A new round of negotiations
After the chaos raised by the comprehensive customs duties announced by the United States at the beginning of the month, the concentration of investors turned towards the developments of bilateral negotiations with countries.
China remains an essential axis, after Beijing announced on Wednesday that it had set several preconditions to agree to hold talks with the Trump administration.
The United States and Japan launched a new round of negotiations, with the aim of reaching an agreement as soon as possible, according to the chief Japanese negotiator, Riosi Akazawa, who said that the second round of the talks would be held later this month.
Countries seek to conclude agreements with Washington to avoid the high fees imposed by Trump – and then hung them later – about 60 commercial partners. This decision suspended the imposition of comprehensive fees by 24% on Japanese imports, but the 10% foundation fees are still valid, in addition to 25% fees on cars, steel and aluminum.
“The market will continue to monitor the path of trade talks between the United States and Japan closely, not only because of its bilateral consequences, but also as a possible model of Washington’s way of dealing with its commercial relations with other allies,” said Rajev de Milo, GAMA Asset Management.
European move to contain tensions
The European Central Bank has reduced interest rates for the seventh time since last June, amid the escalation of global trade tensions that threaten the recovery of the region’s economy.
The interest rate on deposits was reduced by a quarter of a percentage point to 2.25%, according to the expectations of the majority of analysts whose Bloomberg polled their opinions.
Gold rose to a new standard on Thursday, with the support of the demand for safe havens, before it later declined.
