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Wall Street started the week with strong gains after the change of course by the UK Government

People on Wall Street in front of the New York Stock Exchange (NYSE) in New York City, USA. (REUTERS/Brendan McDermid/File)
People on Wall Street in front of the New York Stock Exchange (NYSE) in New York City, USA. (REUTERS/Brendan McDermid/File)

The shares closed with a steep climb on Wall Street, marking the latest change of course in a market that in recent weeks has been teetering between the Profits and the losses.

The S&P 500 rose 2.6% on Monday, more than making up ground lost in Friday’s selloff. The dow jones rose 1.9% and the nasdaq 3.4 percent. Bank of America rose after reporting results that beat forecasts.

The Benchmark Treasury yields pulled back a bit after reaching their highest in several years, while in the UK government bonds rose following news that the country’s new finance minister was abandoning almost all of the unfunded tax cuts announced last month that had unsettled markets.

Bank of America rallied nearly 5% after reporting earnings that beat forecasts, buoying the New York stock market in early trading.

charles schwab Y Bank of New York Mellon also reported earnings on Monday. On Friday, strong bank earnings briefly buoyed markets even as executives said they were setting aside more funds in the event of a recession.

In Europe, the new UK finance minister, Jeremy Hunton Monday reversed most of an economic package announced by the government just weeks ago, including a planned income tax cut.

In an attempt to calm turbulent financial markets, Hunt said he would scrap “almost all” of the tax cuts announced last month and noted that public spending cuts are on the way. He also lowered a cap on energy prices designed to help households pay their bills. It will now be reviewed in April instead of lasting two years.

The pound rose 2% against the dollar after Hunt’s announcements.

The new Minister of Economy, Jeremy Hunt (REUTERS / Henry Nicholls)
The new Minister of Economy, Jeremy Hunt (REUTERS / Henry Nicholls)

Hunt was appointed on Friday after Prime Minister Liz Truss fired Kwasi Kwartengwho spent less than six weeks on the Treasury post.

Markets have been unstable and have swung wildly this past week after a US report will show that inflation remains very high.

In Europe, the Britain’s FTSE 100 rose 0.9%while the CAC 40 from France 1.9%. The Germany’s DAX closed 1.7% higher.

In Asiathe ruler’s meeting Communist Party of China opened on Sunday and is expected to Xi Jinping be reappointed as leader for the next five years. Analysts expect the meeting to reassert Xi’s grip on power and stronger state control over the economy. They expect no changes to Beijing’s “zero COVID policy.”

“The latest updates of the China Party Congress are being examined, and the emphasis on technological advancement and national security they appear to be high priorities for China’s long-term direction. Further decoupling from US technology appears to be the story,” Yeap Jun Rong, market strategist at IG in Singapore, said in a comment.

benchmark index Japanese Nikkei 225 it fell 1.2% to finish at 26,775.79. The S&P/ASX200 of Australia it fell 1.4% to 6,664.40. Kospi from South Korea it recovered to gain 0.3% at 2,219.71. The Hang Seng from Hong Kong rose 0.5% to 16,662.19, while the Shanghai Composite it rose 0.4% to 3,084.94. In Mumbai, the sensex gained 0.8%.

FILE PHOTO: Investors check share prices at a securities office in Beijing, China (REUTERS/Jason Lee)
FILE PHOTO: Investors check share prices at a securities office in Beijing, China (REUTERS/Jason Lee)

In currency trading, the US dollar rose to 148.87 Japanese yen from 148.63 yen. That’s a nearly 32-year low for the yen against the dollar.

Clifford Bennett, chief economist at ACY Securities, noted that the US dollar is likely to continue rising as interest rates rise to offset inflation. That is one difficulty for countries facing sharp increases in import costs and debt payment.

“The outlook is bleak. The economic horizon is dark”, he said about the US economy. “The US dollar will continue to strengthen for the time being, particularly against other Western currencies.”

The euro cost 97.32 cents, compared to 97.21 cents.

Inflation concerns remain although there is some evidence that economies are cooling in some parts of the world. A report last week showing US consumer inflation expectations was another sign that the Federal Reserve could continue to aggressively raise interest ratesalthough that strategy increases the risks of a recession.

The Fed has already raised its benchmark interest rate five times this year, with the last three increases by three-quarters of a percentage point. Wall Street expects another three-quarter percentage point hike at its next meeting in November.

In energy trading, the Benchmark US crude fell 7 cents at $85.54 a barrel in electronic trading on the New York Mercantile Exchange. US crude prices fell 3.9% on Friday. The crude Brentthe international standard, went up 15 cents at $91.78 a barrel.

(With information from AP and AFP)

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Strong rises at the opening of Wall Street due to the good results of Bank of America and the change of course in the United Kingdom

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