Dow Jones is treading water
Economic data from China slows US investors
05/16/2022, 10:33 p.m
The lockdowns in China are affecting the economy. Accordingly, the economic data from the Far East are also causing a bad mood on Wall Street. While Twitter continues to suffer from Musk’s whims, McDonald’s benefits from the Russia withdrawal.
After disappointing economic data from China, US investors did not dare to come out of cover at the start of the week. The leading index Dow Jones Industrial was 0.08 percent higher at the close of trading at 32,223.42 points. The market breadth S&P 500 fell by 0.39 percent to 4008.01 points. After its particularly strong rise on Friday, the technology-heavy stock lost Nasdaq 100 on Monday now 1.16 percent to 12,243.58 points.
“We’re clearly not out of the woods as far as the economy is concerned. Inflation doesn’t seem to have peaked yet, so we can retest the lows and potentially drop even further,” said Robert Pavlik, portfolio manager at Dakota Wealth Management. After a week of losses on the stock market, US investors plucked up courage on Friday and bought shares vigorously. Investors were frightened by a series of weak economic data, which also weighed on the stock markets in Asia and Europe.
After weeks of corona lockdowns, real estate sales in China have recently almost halved. Retail sales in the People’s Republic collapsed by 11 percent in April and Chinese industry also cut production. The data heightened investor concerns that aggressive US Federal Reserve rate hikes to fight inflation could plunge the US economy into recession.
The bleak outlook was further fueled by disappointing US data, which showed New York state manufacturing contracted in May for the third time this year. After the strong price increase on Friday, some investors also cashed in at the start of the week. Meanwhile, optimists gained the upper hand on the crude oil market. the sort Brent rose by almost 2.8 percent to $114.34 a barrel, the price for STI rose by almost 3.8 percent to $114.24 a barrel. The prospect of normal life resuming in sealed-off areas after the corona pandemic was contained in China gave investors hope that demand for oil would increase. Dwindling gasoline inventories also pushed fuel prices to record highs in the US. Due to the lower imports of crude oil products from Europe, further price increases must be expected, says Kazuhiko Saito, chief analyst at brokerage firm Fujitomi.
A hostile takeover bid by the rival drove the individual stocks JetBlue the titles of Spirit Airlines by up to 13.5 percent to $19.28. JetBlue shares, on the other hand, fell by around six percent. Two weeks after the low-cost airline rejected an offer from its larger rival, JetBlue made another push, offering shareholders $30 a share of Spirit. However, one is open to paying the original offer of $33, which Spirit had rejected due to antitrust concerns. Spirit instead wants to merge with competitor Frontier. Frontier shares gained more than 5 percent.
Meanwhile sat Twittershares continue their slide. Twitter shares ended the day in US trading down a good eight percent at $37.38. That’s a far cry from the $54.20 per share that the head of electric car maker Tesla has so far promised Twitter shareholders. Twitter shares had already closed almost ten percent in the red on Friday. Musk initially put the $44 billion acquisition on hold, citing a lack of information about the number of spam accounts.
On the other hand, the investors of MC Donalds-Exit from the Russian business after 30 years only slightly impressed. The shares of the US fast food chain fell by around 0.4 percent. As a consequence of the Russian war of aggression in Ukraine, McDonald’s is selling its Russian business and preparing for a write-down of up to $1.4 billion.