USA, surprisingly the American economy banishes the ghosts of the crisis
15 days ago the Japanese stock market collapsed (the worst drop in 37 years) dragging all the world markets into a Black Monday. The real fear was that the American economy was about to slow down, directly or indirectly dragging down the world economies. But economics does not always respond to mathematical concepts and surprises are always around the corner.
An example of this volatility was Wall Street which changed the wind of crisis. Eight consecutive bullish sessions have restored optimism across the country. A positive streak, the likes of which have not been seen in two decades. The series of increases has pushed the S&P to 6.8%, the best rally since October 2022, The S&P500 (the index of top American companies) went from a fall of 8% in a few days to a positive streak that brought it to almost an all-time high.
USA, Americans continue to spend “with both hands”
But why did all this happen in this way and with this speed? First of all, the Americans have continued to spend regardless of inflation. The litmus test is the supermarket giant Wallmart, which improved its forecasts with record results. Then retail sales, increased by 1% in July.
Among the most popular purchases: vehicles, household appliances, electronic products, gardening and hardware stores, restaurants. Signs of an economy that is working and that consumers believe in. Everyone, or almost everyone, is confident, even if unemployment in July increased slightly, reaching 4.3%. A figure hoped for by many countries but a bit worrying for the American job machine.
USA, many positive voices with some exceptions
Among the many positive voices, there are also some pessimists. “The risk of a more pronounced slowdown in the United States, driven by weak July employment data, has not disappeared,” says a report from the Swiss UBS. AND ING Research further confirms this “We do not believe that the risk of another correction has disappeared. The events of two weeks ago have shown how fragile and nervous the situation is. For now, better-than-expected US macroeconomic data, the idea of a soft landing and likely Fed rate cuts have stabilized the markets, but this does not offer any guarantee against future corrections. We must not forget that there may be more than one reality check for artificial intelligence”.
That said, all eyes are on the Fed’s upcoming annual meeting in Jackson Hole, Wyoming. Most analysts are expecting a strong signal from Jerome Powell’s Fed. According to Bank of America, 60% of them believe that the Fed will make four or more cuts in the next 12 months. And this could also “influence” the messages of the electoral battle between Kamala Harris and Donald Trump.
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