Monday, January 24

Wall Street opens lower, concerned about rates and Europe

The New York Stock Exchange opened lower on Wednesday, in a market worried about the resurgence of Covid-19 in Europe and rising US interest rates.

At around 15:10 GMT, the Dow Jones was down 0.34% at 35,692.28 points, the Nasdaq Index, in which technology stocks dominated, was up 0.56% at 15,686.80 points, and the S&P 500 was expanded. , 34% to 4,675.31 points.

Two days after Jerome Powell was reappointed as President of the US Central Bank (Fed) by US President Joe Biden, interest rates continue to climb.

All U.S. government borrowing rates for 1 to 7 year maturities have returned to their pandemic onset levels.

The most observed 10-year rate is still below its highest levels of the year, but continued to climb on Wednesday, standing at 1.68% from 1.66%.

There reigns, on the market, “the concern of an acceleration of the withdrawal of asset purchases” by the Fed, which would, in all likelihood, bring the deadline for the first rate hike since 2018 closer, explained Karl Haeling, of the LBBW bank.

The impression was further reinforced by statements from Fed Headquarters San Francisco Chair Mary Daly, who said she was open to a faster slowdown in asset purchases under the assumption that inflation would persist.

“There are more people who are withdrawing from equities,” observed Karl Haeling, which extends to all sectors the downward movement which was essentially limited to technology stocks on Tuesday.

According to the analyst, the prospect of the end of the month, which may correspond to changes in portfolios, could accentuate the movement in favor of the bond market, which has become more attractive with its revalued rates.

On the eve of the long Thanksgiving holiday weekend, Wall Street also took a dim view, according to Karl Haeling, of the resurgence of coronavirus cases in Europe, where several countries have taken containment measures.

Few reactions, however, to the rain of US macroeconomic indicators that fell in the morning.

The PCE index thus showed inflation at 5% over one year, the highest for 31 years, a level already largely integrated by investors since the publication, in early November, of another price index, the CPI, at 6.2% over one year.

In addition, weekly jobless claims fell to their lowest level since 1969.

In the table of values, the specialist in agricultural and construction machinery John Deere benefited from quarterly results above expectations (+ 4.90% to 366.41 dollars).

The group expects a net profit up 9 to 17% next year (from November to October).

The computer manufacturer HP also surfed on results far above forecasts (+ 11.15% to 35.78 dollars).

The net profit forecast for the lagged first quarter (November to October) for the Palo Alto, Calif., Company is in line with expectations.

Like Tuesday, the distribution was, however, cut to pieces, after new publications deemed disappointing.

The chain of Nordstrom department stores thus declined (-28.67% to 22.77 dollars), guilty of having presented a net profit lower than expected by analysts and consumed by the increase in costs.

Free fall also for the textile chain Gap (-22.99% to 18.10 dollars), which launched a result warning, victim of insufficient supplies, results of disruptions linked to Covid-19.

  1. Nasdaq

Leave a Reply

Your email address will not be published. Required fields are marked *