A citizen walks in front of the facade of the New York Stock Exchange. /
The stock markets react to the rise and the Ibex chains its seventh session of increases and consolidates 8,300 points
The moderation in gasoline prices has been vital for the US economy to receive a break amid inflationary pressures that this year have even dusted off global recession alarms.
Thanks to the drop in fuel prices, the CPI for the leading world power ended July at 8.5% year-on-year, six tenths less than the 9.1% of the previous month and below the 8.7% estimated by the consensus . And that the rise in food prices accelerated to 10.9% from 10.4% in June, the largest increase since May 1979.
The reaction in the stock markets was immediate, with Wall Street registering notable increases after the publication of the data. In Europe, the increases were also consolidated and the Ibex-35 rose 0.49% at the close to 8,352 points in its seventh consecutive session of increases. You have to go back to May 2020 to find a similar positive streak.
Colonial and ArcelorMittal led the increases in the selective with advances of more than 3% at the close, while other large stocks such as Amadeus, Inditex or Banco Santander rose more than 2%. On the other hand, Grifols, with losses of 2%, and Solaria (-1.6%) were at the bottom of the table, followed by Bankinter and Telefónica, which also lost more than 1%.
interest rates
The big surprise for investors actually came from the core CPI data (which excludes gasoline and food). Market consensus expected the benchmark to pick up to 6.1%. But finally it remained at 5.9%, in line with the previous month.
“The reading of this variable will provide greater clarity to investors, both about the current situation of the global economy, and the path that the Federal Reserve (Fed) will follow in terms of interest rates”, indicate analysts at Link Securities.
A first reading could indicate that the agency would have room to slow down the pace of interest rate hikes if it is confirmed that inflation has already peaked. But the truth is that current levels are still historically high.
As indicated by the Federated Hermes fund manager in an analysis of the data, “the fight against inflation is far from over. And the risks of high inflation taking hold remain high in the context of a tight labor market. Consequently, they consider that the Fed will maintain its aggressive path in the coming months.
“Depending on the data in the coming weeks, the agency will raise rates by 50 or 75 basis points at its September meeting, and it is unlikely that there will be a change in orientation before the end of the year,” they say.