The US economy is doing well. At least for now. It must be said that if we look at the economic surprises (difference between the published statistics and the figures that were expected), Uncle Sam has stood out more than the Old Continent in recent months. “The October figures for retail sales in the United States confirm that the world’s largest economy is experiencing a strong rebound in consumption. But even if US consumption remains strong for now, the risk of stagnating Covid vaccination rates and the reluctance of those already vaccinated to accept a third dose could jeopardize the US recovery in the coming months, as the thermometer is dropping ”, notes César Perez Ruiz, investment manager at Pictet Wealth Management.
According to the Geneva wealth manager, the multiplication of Covid-19 cases around the world represents the greatest threat in the short term, especially in countries with the lowest vaccination rates. “The stagflationary effects (high inflation and growth under pressure, editor’s note) of the pandemic, likely to reinforce current inflationary pressures, could well resurface,” he warns. The House of Representatives adopted Joe Biden’s plan, which plans to invest $ 1.7 trillion in human infrastructure. “But the negotiations on the debt ceiling which will take place next month in Congress could compromise the timetable for its implementation,” warns César Perez Ruiz.
>> To read also – Growth, inflation… stagflation is coming according to Amundi, the stock market may stall in 2022
What does technical analysis say?
From a technical analysis standpoint, the S&P 500 and the Nasdaq are showing signs of fatigue on Wall Street. On the Nasdaq, Joris Zanna, analyst for DailyFX, notes “a false exit from the top of the bullish channel” (“euphoria”), “a bearish swallow” on the previous day’s session and “a bearish divergence on RSI”, which “Pleads for a deeper correction to come,” he said.
>> To read also – Will inflation cause the stock market to falter?
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Author’s declaration of interests