Dow Jones closes in positive territory
Fear of recession dampens investor sentiment
12/07/2022, 10:13 p.m
The stock market traders are concerned about the economy. The sharpest slump in Chinese exports since the beginning of the corona pandemic is also causing some share prices to plummet. A weak economy makes Wall Street heads bow.
Concerns about the global economy after pessimistic forecasts from top bankers and weak trade data from China have dampened the mood on the US stock exchanges. Of the Dow Jones Index the standard values remained unchanged at 33,596.87 points. The broader one S&P 500 fell 0.19 percent to 3933.78 points. The index of the technology exchange Nasdaq was down 0.51 percent at 10,958.55 digits.
“The latest data from China highlights the challenges facing the global economy going into 2023,” said Craig Erlam, market analyst at trading house Oanda. Investors questioned the recent rally in prices, which had been buoyed by hopes of a slower pace of interest rate hikes by the US Federal Reserve.´
In addition, they are already looking forward to the interest rate decisions of the Fed and the ECB in the coming week to get further indications on the direction of monetary tightening. The monetary authorities in Canada raised the key monetary rate by half a percentage point to 4.25 percent – the highest level in almost 15 years. The majority of experts are also assuming half a point for the Fed.
The North Sea variety Brent won 0.4 percent to $ 77.48 per barrel (159 liters) and the light US variety STI fell 2.49 percent to $73.40 a barrel. “There has been a lot of news for oil traders over the last week, some of which raised more questions than answers,” Erlam said.
Trade data from China is of course a setback, but in the longer term the easing of China’s corona policy could prove supportive for crude oil prices. Recession fears pushed the gold price up 0.8 percent to around $1,785 an ounce. Risky assets such as cryptocurrencies, on the other hand, fell. Bitcoin lost 1% to $16,842 and Ethereum fell 1.6% to $1236.
US-listed Chinese stocks like pinduoduo and Alibaba fell by 1.25 or 3.33 percent after the sharpest slump in Chinese exports since the beginning of the corona pandemic. The US electric car manufacturer Tesla was down 3.21 percent due to concerns about production at its Shanghai plant. Apple was also under pressure following a forecast cut by Morgan Stanley, losing 3.21 percent. The reason is production delays at a Foxconn plant in China. Carvana fell 42.62 percent to $3.85 after investment bank Wedbush downgraded its rating. Their analysts see an increasing risk of bankruptcy for online used car dealers.