Wall Street climbed on Friday while S&P and Nasdaq reached new historic highs for the fourth time in the week following on statements from Fed chairman Jerome Powell at the Jackson Hole symposium when he anticipated a moderate, non-aggressive calendar reduction in the purchase of bonds.
There is a positive reaction from markets to the Federal Reserve's moderate attitude. The historic maximums of the indexes, and yet another record for S&P on Friday, show a consistent rise in shares, with soft falls and very quick recoveries, according to Wall Street analysts.
Fed Chairman Powell did not anticipate a specific calendar for cutting bonds and assets purchases nor did he talk about future rises of interest rates, both crucial elements in the monetary policy to help the US economy recover from the pandemic recession.
This position somehow placated the more aggressive position of other members of the Federal Open Market Committee, FOMC, who had forecast the announcement of an assets reduction calendar at the Wyoming symposium. Saint Louis Fed chair James Bullard and Cleveland Fed chair Loretta Mester had anticipated such an announcement following the meeting.
Markets are happy the Fed is willing to inject liquidity to the economy every month, said analyst Bill Zigmont. Assets' prices are climbing and markets are satisfied, he added.
Data published on Friday showed precisely what economists had anticipated, a cooling of spending and confidence from consumers because of the quick spread of the Delta Covid 19 variant. Likewise that the current wave of price hikes will not turn into long term inflation, as the Fed and US Treasury Secretary have repeatedly stated.
In effect the Dow Jones Industrial Index was up 242,68 points to 35,455,8 units (0,69%), while S&P advanced 39,37 points (0,88%) to 4,509.37 units and the Nasdaq Composite rose 183,69, (1,23%) reaching 15,129.50 units. The energy was the most dynamic among the eleven sectors that helped the S&P Friday record.