The key indices of the US stock market - Dow Jones, NASDAQ, and S&P 500 - ended Friday with a powerful fall. Thus, from our point of view, everything is going according to plan, as we predicted in our last articles. Recall that the opinion about the fall of stock indices and stocks in 2022 is very common since the fundamental background is too unambiguous to expect anything else. The Fed may raise the key rate by 0.5% as early as May, and this step will be only the first step in the whole cycle of monetary policy tightening, which has already been called the most aggressive in recent decades. Even if Jerome Powell confirmed that the rate will be raised in May by 0.5% at once, this means that the mood inside the Fed is really "hawkish". It only intensified last week. In addition, the yield of US government bonds is growing, which reduces the demand for stocks and indices. Inflation continues to remain high, but at the same time, no one doubts that it will begin to decline sooner or later in the United States, unlike the European Union, where the ECB itself cannot decide whether it needs to raise the rate or not to risk the onset of a recession on the economy.
Meanwhile, the second round of presidential elections took place in France. As we have already said, this event may not have a strong impact on the currency or stock market, but it is certainly important. After counting 100% of the votes, Macron scored 58.55%. Thus, pre-election simulations, opinion polls, and research predicted Macron's victory correctly. However, as political analysts say, the overall picture of the state of things for Macron and his party has worsened. The first round of elections showed a strong split in society, as the far-right and far-left candidates won a fairly large number of votes. Accordingly, already at the parliamentary elections in July, Macron may lose the ruling majority in parliament. Experts also note negative trends in French society. First, about 28% of the population did not come to the polls - this is the highest rate of non-attendance since 1969. Second, Le Pen has reduced the gap by almost half compared to the elections five years ago and has already announced that she and her party will be preparing for parliamentary and presidential elections in 5 years.
Meanwhile, there were no important military events in Ukraine. Over the past few days, fighting continued in the East of the country, and several missile strikes were also carried out on Ukrainian cities. However, there were no new data on negotiations, offensive, or sanctions. At the moment, US Secretary of State Antony Blinken and US Secretary of Defense Lloyd Austin is in Kyiv. Two high-ranking officials will certainly discuss new arms supplies to Ukraine. In the near future, the lend-lease program may start working, which will allow the States to supply various kinds of weapons to Kyiv without long delays and in almost any volumes.
