Stocks ended on a shaky trend and mixed results, after the Federal Reserve pledged to keep buying bonds until the economy makes substantial progress, watching the evolution of vaccines and negotiations on Capitol Hill for a new financial stimulus package.
The Dow Jones industrial index contracted 0.2% this Wednesday, the expanded S&P 500 indicator expanded 0.2% while the Nasdaq technology increased 0.5%, according to figures provided by the Bloomberg agency.
Stocks approached record highs after the Federal Reserve pledged to continue buying bonds and to keep the benchmark rate in the 0-0.25% range, until the economy hits 2% inflation and job growth. % per year.
The Fed said it would buy at least $ 80 billion in Treasuries each month and $ 40 billion in agency mortgage-backed securities until substantial progress has been made.
Operators were very attentive to the progress made in Washington regarding the approval of a new stimulus package, although a final agreement has not yet been reached.
Traders, economists, investors and even Fed officials have said that support is crucial, because the Fed’s tools alone cannot help the economy.
Interest rates tending to zero can boost the mortgage market, the price of company shares, but they cannot assist families and small companies whose businesses have been affected as a result of the pandemic.
If a quick agreement is not reached in the Capitol and the approval of a new package is delayed, the situation can get worse.
The Commerce Department reported today that retail sales plunged 1.1% last month. It is the second consecutive month of weakness, a result much worse than the 0.3% decline that economists expected and the worst record in the last 7 months.
If Congress can reach a deal, it could help the economy weather a bleak winter, before one or more coronavirus vaccines can neutralize the effects of the coronavirus.
In Europe, optimism reigned in the stock markets based on industrial data that showed growth in activity and overshadowed the new restrictive measures throughout the euro zone, to limit movements in the end of the year holidays.
The operators trust that the containment measures will be limited no later than the first half of January.
Also influencing investor sentiment was progress in the London-Brussels negotiations over Brexit.
The leading Euro Stoxx 50 index gained 0.6%, while in London the FTSE grew 0.9%.
The DAX 30 in Frankfurt increased 1.5%, and the CAC 40 in Paris rose 0.3%.
The IBEX 35 contracted 0.2% while the Milan MIB climbed 0.2%.