The worst December for the US stock market

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The main financial indices fell dramatically again, helping to complete a fatal month for the stock market and its investors

The worst December for the US stock market

For investors and analysts, the financial landscape in the United States is full of uncertainty. Concern that resulted in a widespread collapse of the indices that measure the performance of the shares traded there, the last in what has been a difficult last quarter of the year, which culminated in the worst month of December for the stock market since the Great Depression.

Leer en español: El peor diciembre para la bolsa de EE.UU.

Perhaps the first concern of investors is the threat of a possible closure of the government in the United States, product of the financing plan proposed by Donald Trump to comply with the construction of the wall on the border with Mexico.

The conflict between the Republican and Democratic sides in the Senate led to threats of closure, where Trump declared he would be proud to close the government in the search for greater border security. However, he did not take any risks, and ended up signing a temporary agreement yesterday to finance the government that dilates the situation and prevents the closure at least until February 8.

Although the crisis was avoided, the situation in the United States Congress worries investors, particularly because the bill that causes the controversy has to do with the state budget. In a second place, the loss of investor confidence also arises from the actions of the Federal Reserve (Fed) of the United States.

This week the Fed raised interest rates again, for the fourth time in the year, which are now around 2.25% to 2.5%. Many investors have referred to the actions of the Fed as 'hawkish', an adjective that describes an attitude that puts the soundness of public finances above the welfare of the markets. This worries investors, who will not now feel that the stock market is backed by the Fed.

Read also: The world's stock exchanges fell: Do you know how much and why?

"By ignoring turbulence in the financial markets and focusing on economic strength, Powell (President of the Federal Reserve) told the markets that the Federal Reserve will not be willing to modify monetary policy to support the prices of the assets in question. the stock market", said Brad McMillan, chief investor for the Commonwealth Financial Network at the Washington Post. "Without the support of the Federal Reserve, the markets will be on their own how they had not been in decades," he concluded.


LatinAmerican Post | Pedro Bernal
Translated from "El peor diciembre para la bolsa de EE.UU."