Analysts predict that 2023 will be a difficult year for the world economy. The dollar remains volatile, the markets fear that covid-19 will continue to increase in China and social networks are not far behind: Trump’s Twitter account was activated once more.
dollar in chile
The price of dollar posted further momentum to start the week, looking to move closer to $950, following trading very close to $880 just a few days ago.
“The external fundamentals continue to be key for the exchange rate, especially due to a renewed appreciation of the US currency worldwide, supporting its movement in our country, in addition to a further drop in the price of copper”explained Ricardo Bustamante, head of trading studies at Capitaria.
The red metal loses ground due to fears generated by highest covid-19 cases in China, that might generate an impact on the demand for the commodity.
If less demand for copper is expected, the price would fall and it projects revenues of fewer dollars for the country, a situation that would generate excess demand for the US currency and supports its further increase.
“This week we will be very attentive to the minutes of the last meeting of the Fed where we might see clearer signs with the next movements of rates in the US”, they specified from Capitaria.
Everyone attentive to the data in the United States
Members of the US central bank stated on several occasions throughout the week that they intended to continue with an aggressive rate adjustment policy. This led the major indices to fall last week, with the S&P 500 down almost 0.7% and the Nasdaq down almost 1.2%.
The Fed is expected to release the minutes of the November meeting on Wednesday. Investors are anticipating any indication that the Fed may be considering halting the tightening process following raising rates faster this year than at any time. since the 1980s.
To avoid tightening more than necessary and sending the economy into a recession, Fed Chairman Jerome Powell — and other policymakers — they have hinted that the central bank may switch to lower rate hikes next month.
A half-point rate hike is likely at the December meeting and Powell has acknowledged that ultimately rates may have to rise above the 4.6% that policy makers thought they would need by the end of the year.
In a news conference following the meeting this month, Powell acknowledged that the inflation situation has become more difficult and that he and his colleagues still have a long way to go in terms of bringing down rapidly rising prices.
What regarding inflation in Chile?
The Central Bank’s Survey of Economic Expectations projects that inflation in the country will continue to fall in the last months of 2022.
The INE revealed the data corresponding to the Consumer Price Index (CPI) for October, reaching 0.5% in the tenth month of the year and marking a respite in inflation.
“Although the result continues to accumulate a high figure both so far this year (11.4%) and in the last twelve months (12.8%), the trend would reveal increases closer to normal months,” Bustamante commented.
What is happening in the markets?
He started the week with concerns regarding the holiday shopping season when Amazon and FedEx started laying people off. Amazon even offered employees severance pay if they voluntarily resign at the end of November.
Meanwhile, earnings releases from retail companies were mixed but largely better than expected. Walmart, Home Depot and Lowe’s managed to comfortably beat expectations, while traditional mall-related retailers also rallied. Target has not fared well as the company struggles to run its business in today’s environment.
Wall Street will be closed for the Thanksgiving holiday on Thursday and close early on Friday.
Investors will be watching the sales of the Black Fridaysince it is believed that will be a significant indicator of consumer confidence and the health of the retail industry ahead of the holiday shopping season.
Social networks
Follow the storm on Twitter as the company goes into “extreme mode”with approximately 75% of its employees abroad.
Secondly, Elon Musk reinstated the former president’s Twitter account Donald Trumpwhich had been suspended.
Musk promoted a 24-hour poll that ended on Saturday to ask whether former President Trump, whom the platform suspended indefinitely following linking his comments to the storming of the Capitol.
The tycoon, who bought the network for $44 billion, also said in a series of tweets that “Twitter’s content moderation council will integrate representatives with very divergent points of viewwhich will no doubt include the civil rights community and groups fighting hate-fueled violence.”
Mark Zuckerbergfor his part, resorts to Whatsappp to restart the growth of Meta Platforms.
In a company-wide meeting, the CEO assured his employees that he is not blinded by the Metaverse. He noted that messaging in the company’s WhatsApp and Messenger products “It will probably be the next major pillar of our business.”
Monetization of these globally popular products is still in its early stages, leaving room for future growth.
A worse 2023 for Wall Street?
Morgan Stanley analysts predict that 2023 will be a difficult year for the global economy.
Despite the fact that in this last quarter some economies such as the US have gradually managed to control their inflation levels, this would not translate into good news for investors.
The big drop seen so far in key indices like the S&P 500 might be just one part of a big drop to come in 2023.
