Fear of recession grips US stock exchanges: Dow Jones ends a dark week at a low for the year

Fear of recession grips US stock markets
Dow Jones ends dark week at annual low

09/23/2022, 10:51 p.m

The slide on the US stock exchanges continues. On Friday, investors plagued by recession fears pulled the ripcord on risky investments and sent prices on the stock markets to their lowest levels of the year. As oil prices continue to plummet, the dollar is at its highest level in 22 years.

A pitch-black week on Wall Street has come to an end with renewed heavy daily losses. The prospect of further interest rate hikes and growing fears of a recession weighed heavily and led to a global sell-off. The Dow Jones index fell to a yearly low and is down 4 percent on the week. Following the third 75 basis point rate hike on Wednesday, Fed President Jerome Powell stressed that fighting inflation is a top priority for the US Federal Reserve – even at the expense of economic growth.

Of the Dow Jones Index closed 1.6 percent lower at 29,590 points – 20 percent below its record level in early January. Of the S&P 500 noted 1.7 percent lighter. For the Nasdaq Composite was down 1.8 percent. “A week marked by further aggressive monetary tightening around the world has hurt equity markets amid a deteriorating outlook,” said Richard Hunter, Head of Markets at Interactive Investor. “The large number of central banks that are tightening their monetary policy increases the risk of weaker economic growth,” the ANZ added. Steve Englander, Standard Chartered’s head of global G10 currency research, now forecasts a 75 basis point hike in Fed interest rates in November and another 50 basis point hike in December.

The fact that the purchasing manager indices for manufacturing and the service sector for September were better than expected did not slow down the sell-off either.

Dollar advances significantly – oil prices under pressure

The dollar rallied on the prospect of more sharp rate hikes from the US Federal Reserve. Of the dollar index increased by 1.5 percent. In return, it went for the Euro down. It fell to $0.9666, its lowest level since its physical launch in 2002. The euro could fall further against the dollar as the US Federal Reserve maintains its tight monetary policy and the eurozone is threatened with recession, UBS Global Wealth said Management. Analysts expect the shared currency to slip to $0.96 by the end of the year.

That Pound Sterling was under a lot of pressure. The trigger was the UK government’s comprehensive package of tax cuts and regulatory reforms, which it intends to use to revive the UK economy, which is plagued by inflation. The pound lost 3.5 percent to $1.0862.

With strong deductions of up to 5 percent showed the oil prices and posted a fourth straight weekly loss as central banks around the world continue to aggressively hike interest rates. This will likely dampen economic activity and reduce demand for energy, it said. The strong dollar also weighed on oil prices as it makes US dollar contracts more expensive for foreign buyers. STI fell below the $80 a barrel mark for the first time since early January.

Yields tended to be mixed bond market. At the short end, concerns about inflation and the Fed’s increased interest rate projections went up again, albeit less strongly than in the past few days. The yield on 10-year paper, on the other hand, fell 2.6 basis points to 3.69 percent. The strong dollar and the prospect of further significant rate hikes kept the price of the troy ounce low gold down 1.6 percent. “The trend of rising interest rates is likely to continue for a while, which means that gold, in turn, could also remain under selling pressure for some time,” said Rupert Rowling, market analyst at Kinesis Money.

Boeing stock falls with fine

For the Boeing stock was down 5.4 percent. The US aircraft manufacturer has to pay a fine of 200 million dollars. Boeing “negligently” violated the anti-fraud provisions of the US securities laws, the Securities and Exchange Commission said in a statement released on Thursday. Boeing is said to have misled the public about the safety of its 737 Max aircraft after the deadly plane crashes in 2018 and 2019.

the Qualcomm stock lost 2 percent despite positive-sounding statements at an investor event. The chip manufacturer can therefore hardly save itself from orders for the automotive industry and, in view of the good order situation, has increased its medium-term forecasts for sales in the business with chips for the automotive industry. However, the technology sector is particularly sensitive to the prospect of rising interest rates, it said.