Big banks in the crosshairs
Wall Street nervously awaits financial statements
10/11/2022, 10:20 p.m
There is no calm on the stock markets. After nervous ups and downs, the Dow Jones closes slightly higher, S&P 500 and Nasdaq end the trading day with further losses. Above all, Uber, Lyft and Doordash will be penalized – due to a possible regulation by the US labor authorities.
A few days before the start of the Wall Street accounting season, nervousness among investors is mounting. The US indices went on a roller coaster ride on Tuesday. Speculations about disappointing company results initially caused further losses, but then the stock exchanges made up ground thanks to bargain hunters.
At the close of trading it was Dow Jones 0.1 percent up at 29,239 points. A price increase of the pharmaceutical company amgen of more than six percent after a positive analyst comment helped the standard value index up. The broader one S&P 500 fell by 0.6 percent to 3588 points. The index of the technology exchange Nasdaq listed 1.1 percent lower 10,429 points. The volatility index neared its two-week high.
Europe’s stock exchanges had previously fallen for the fifth trading day in a row. “Rampant inflation combined with a restrictive monetary policy, geopolitical tensions and the fear of a recession are fundamentally weighing on the stock markets,” said investment expert Salah Bouhmidi from the trading house IG Europe.
Economic pessimists were also in the majority on the raw materials markets. The crude oil variety Brent from the North Sea fell by two percent to $94.24 per barrel (159 liters) and copper by 0.3 percent to $7556 a ton. The resurgence of the coronavirus pandemic in top buyer China is also depressing the mood here, said stockbrokers.
Banks in the Crosshairs
Economically sensitive stocks fell out of favor with investors. The S&P 500 Bank Index fell more than a percent to its lowest level since November 2020. Investors tremble at a glimpse into the health of the US economy when four of the country’s largest lenders – JP Morgan, Wells Fargo, Citigroup and MorganStanley will open their books at the start of the accounting season.
“The net margin numbers should be very good for those banks that aren’t tied to investment banking revenues, but should be pretty weak for those that are,” said Rick Meckler, a partner at wealth manager Cherry Lane Investments .
Shares of the US ride-hailing service providers Above and lyft and the food supplier door dash came under pressure and lost between six and twelve percent. The background is a planned regulation by the US labor authorities that would make it more difficult for companies to treat employees as independent contractors. Thus, workers would be entitled to more benefits and legal protections, which would increase labor costs.
Coinbase investors hail Google partnership
Zscaler stood out with a loss of more than four percent. The president of the provider of a cloud-based security software platform, Amit Sinha, surprisingly resigns his post.
Coinbase on the other hand, after the announcement of a partnership with the search engine service Google, they took off. At the top, the titles of the cryptocurrency platform increased by 7.5 percent. Some Google customers should be able to pay for their cloud services with selected cyber currencies via Coinbase.
“For Coinbase shareholders, this news is grist to the mills. It remains to be seen to what extent demand will actually develop in a practical sense,” said analyst Timo Emden of Emden Research.