Dow Jones down again
Rate hike worries slow Wall Street
09/15/2022, 10:20 p.m
The tentative stabilization on the US stock exchanges is over after just one day. US economic data paints a mixed picture and offers investors no reason to change their risk aversion.
Speculations of further drastic US interest rate hikes fueled by robust economic data are keeping investors away from Wall Street. Of the Dow Jones Index closed 0.6 percent lower at 30,962 points S&P 500 noted 1.1 percent lighter (3901 points). For the Nasdaq Composite it went down 1.4 percent (11,552 points).
“The economic environment is quite good,” said Mabrouk Chetouane, chief investment strategist at wealth manager Natixis. Everything points to an interest rate hike by the central bank of 0.75 percentage points in the coming week. US retailers surprised sales in August, while fewer than expected Americans filed for unemployment benefits last week. Against this backdrop, some investors are even expecting a rate hike of a full percentage point. “But we don’t expect the Fed to do that,” said Naeem Aslam, chief market analyst at brokerage firm AvaTrade. “It would significantly increase the risk of the US economy slipping into recession.”
Bond investors are already bracing for a downturn. Because they are mostly shorter-running US Bonds out of their accounts, the yield on the two-year bond rose to a high of 3.864 percent. Her ten-year-old counterparts on the other hand, only 3.455 percent started. This phenomenon is called “inverted yield curve” in stock market jargon, because longer-dated securities usually bear higher interest than shorter-dated ones. Experts see this development as a harbinger of an approaching recession. “Due to the quality of the forecast so far, stockbrokers should take the warning of the inverse curve very seriously,” warned portfolio manager Thomas Altmann from the investment advisor QC Partners.
In the cryptocurrency market, investors turned their eyes to the long-awaited cryptocurrency software update Ethereum, which apparently went smoothly. But that was expected, said Andreas Wölfl, founder of the certificate issuer iMaps ETI. As a result, some investors took advantage of the rally over the past few months to take profits. The second most important cyber currency after Bitcoin fell by almost eight percent to $ 1506. US crude oil also went down STI, which fell 3.4 percent to $85.38 a barrel (159 liters). “There are many forces currently dictating price movements in the oil markets, with economic uncertainty leading the way,” said analyst Craig Erlam of broker Oanda.
In contrast, the railway operators, who were still shaken yesterday, were in demand Union Pacific or Norfolk Southern, whose shares rose in price by up to 0.5 percent. rival CSX however, was unable to defend its initial gains and lost 3.4 percent. CEO James Foote retires. The companies settled the wage dispute with their employees and thus averted a strike. According to experts, the economic damage would have been in the billions. “This is great news,” commented Swissquote Bank analyst Ipek Ozkardeskaya. This would avoid further disruption of the supply chains and additional price pressure.
The share of Adobe collapsed by 16.8 percent. The company said it would acquire design platform Figma for $20 billion, taking the opportunity to bring forward the release of fiscal third-quarter results, which were supposed to be after the market close. Sales fell short of expectations, but earnings per share were better than expected.
Activision Blizzard were listed 0.3 percent higher after the British competition authority CMA announced an in-depth review of the planned takeover of the online games provider by Microsoft (-2.7 percent).
Tesla (+0.4 percent) has been sued for information about its driver assistance technology in the electric cars. A lawsuit filed in federal court in San Francisco alleges that the company made false promises about the technology. The capabilities of its autopilot and full self-driving functions are “deceptively and misleadingly” exaggerated. gap fell 3.6 percent after rapper Kanye West canceled his partnership with the clothing company over alleged breaches of contract.