By John Meyer, financial consultant. Eurasia Business News, January 31, 2022

The New York Stock Exchange offered a second rebound session on Monday led by technology stocks, even if the month of January ended with a sharp correction, of nearly 10% for the Nasdaq and 4 % for the Dow Jones, in anticipation of a less accommodating monetary policy from the US Federal Reserve. Investors are taking advantage of recent setbacks to buy “techno” stocks cheaply, after the better than expected results of Apple Inc. (AAPL) before those expected this week from Alphabet Inc. (GOOG), Meta Platforms Inc (FB) and Amazon.com, Inc. (AMZN).

Two hours before closing, the Dow Jones gained 0.62% to 34,941 points (after +1.65% on Friday), while the broad S&P 500 index climbed 1.24% to 4,486 pts (+2.4 % Friday) and the Nasdaq Composite, rich in technology and biotech stocks, gained 2.43% to 14,105 pts (after +3.1% on Friday). Last week, the markets had been shaken, but had managed to finish up over five sessions: +1.3% for the Dow Jones, +0.8% for the S&P 500 and stability for the Nasdaq (after 4 weeks of recoil).

Read also : Gold, Build Your Wealth and Freedom

January was a very volatile month for stock markets, with investors reacting to the prospect of a faster-than-expected U.S. Fed hike in key rates in 2022, accompanied by a reduction in its balance sheet, which should make credit conditions less accommodative for companies and households.

How far will the Fed go to control inflation?

The American central bank confirmed last week that it would begin, probably in March, a raising cycle of key interest rates, in order to curb the inflation surge that followed massive quantitative easing during the covid-19 period. Many banks, including Goldman Sachs, now expect up to 5 rate hikes in 2022, with Bank of America even expecting 7 turns of the screw, after two years of near-zero rates due to the health crisis.

The U.S. inflation surged to 7% over 2021, a record since June 1982, after hitting 6.8% in November.

The U.S. Federal Reserve is expected to start raising interest rates in March from currently near zero to 1.25% by the end of 2022, but while continuing to support the economy, said Mary Daly, the Chairman of the San Francisco branch of the U.S. Fed, on Monday.

As a result of high inflation over 2021, the crypto crash since December and low stock markets, gold prices have strongly increased over the past weeks, as the yellow metal is usually seen as a great hedge against inflation and turbulences of financial markets. Gold reached $ 1,798 per troy ounce on January 31, after $ 1,848 per troy ounce on January 25.

Read more about gold, inflation and monetary imbalances with Gold : Build Your Wealth and Freedom

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