This is the quarter of the US economy recording its slowest growth since the Covid-19 pandemic. This took place in the context that the number of Covid-19 infections continued to increase sharply in recent times as well as the broken supply chain that has slowed the recovery of the world economy in general and the US in particular.
However, many businesses, especially US technology enterprises, still recorded positive profit growth, making the US stock market continue to maintain its upward momentum.
Elsewhere, the European Central Bank (ECB) and the Central Bank of Japan (BOJ) recently released their latest statements on monetary policies in the near future. Specifically, in its meeting on October 28, the ECB said it would continue to maintain loose monetary policies but would narrow asset purchase policies.
The ECB said it would keep the refinancing base rates, marginal lending rates and deposit rates low, at 0%, 0.25% and -0.5% respectively for continued support. market liquidity and continue to accept inflation above the target level in the short term.
The ECB will also maintain the APP asset purchase package by reducing the pace of purchases compared to the second and third quarters of 2021.
Meanwhile, the BOJ announced that it will continue to keep the loose monetary policy unchanged in the near future with the base interest rate unchanged at -0.1%. In addition, the BOJ continues to buy ETF certificates at a rate of JPY 12 trillion/year, while buying government bonds and corporate bonds at a rate of JPY 20 trillion/year.
These decisions were made in the context that the Japanese economy has not yet recovered as expected in the face of existing difficulties related to the Covid-19 epidemic.
The positive business results of listed companies as well as the fact that the companies have price strength while maintaining the same gross profit margin in the context of a sharp increase in input material prices are the main driving forces behind the growth. the growth of US stock indexes in recent times.
Companies in the S&P 500 are forecast to see third-quarter profits rise 38.6 percent year-over-year. Of the 244 S&P 500 companies that have posted results, 82% have outperformed expectations. The Dow Jones index recorded strong growth when it crossed the balance line and is currently in a leading phase, showing that money has flowed into the market. In addition, in anticipation of President Biden's commitment to achieve a budget of $ 1,750 billion to stimulate the economy is also one of the driving forces behind the market.
The S&P500 and Nasdag indexes both set new historic highs with gains of 0.98% and 1.39% respectively in yesterday's trading session.
In contrast, the USDx recorded strong selling pressure as the US economy grew much lower than forecast, recording the slowest growth since the Covid-19 pandemic. This makes investors expect that the Fed will continue to keep the monetary easing policy unchanged, thereby making the greenback less attractive in the eyes of investors.
