The floor of the New York Stock Exchange (GETTY IMAGES NORTH AMERICA/AFP/SPENCER PLATT)
The New York Stock Exchange ended a negative week at half-mast on Friday, weighed down by high bond rates and geopolitical risks before the weekend.
The Dow Jones index lost 0.86% to 33,127.28 points, the technology-dominated Nasdaq fell 1.53% to 12,983.81 points and the broader S&P 500 index fell 1.26% to 4,224. .16 points.
Yields on 10-year Treasury bills briefly touched 5% in post-closing trading on Thursday evening, a high since July 2007. Friday around 8:30 p.m. GMT stabilized at 4.91%.
“Investors do not want to take risks before the weekend while tensions remain high” in the Middle East on the 14th day of the war between Israel and Palestinian Hamas, indicated Jack Ablin, specialist in investment strategy, at Cresset.
“While we are facing a wall of concerns, investors have shown little appetite to go beyond this wall in recent sessions,” commented Schwab analysts.
The ounce of gold, the safe haven par excellence, gained 0.56% to $1,991.60, after climbing during the session to a five-month high, just above $2,000 per ounce.
“Gold is doing well in this risk-averse environment,” said Jack Ablin for AFP.
Among the indicators, the American government revealed the annual budget deficit of the federal state which soared to 1,700 billion dollars for the 2023 fiscal year ending September 30.
The deficit thus widens by 23% due to a reduction in tax revenue but also an increase in debt service, due to the rise in rates.
The massive issuance of new government bonds to repay the maturities of a still large deficit is often cited as one of the factors in the rise in yields on Treasury bills.
Investors also continued to weigh the words of Jerome Powell, the president of the American central bank (Fed), who on Thursday gave food for thought to both the hawks and the doves, that is to say for the supporters of high rates as well as those of a more flexible monetary policy.
“He stressed that it was imperative to return to sustainable inflation and that the road to achieving this would be long and unpredictable,” summarized Wells Fargo analysts.
As for company results, the general impression is mixed. “Companies manage to beat forecasts on their results but not on their turnover,” noted Jack Ablin of Cresset.
“Business growth is not there. This is not a good recipe for profit expansion,” said the analyst.
On the value side, Tesla continued its fall (-3.69% to $211.99), dragging the Nasdaq down. The stock of Elon Musk’s group has fallen by almost 16% since the start of the week, due to disappointing quarterly results.
During an audio conference, Elon Musk also blamed at length the rise in interest rates which increases his production costs and hampers credit purchases of his vehicles.
The shares of other electric vehicle manufacturers were dragged into the red such as Rivian (-2.56%) or Lucid (-1.38%).
American Express, a heavyweight on the Dow Jones, lost 5.38% to $141.57 despite quarterly results better than forecasts. The group reported continued growth in consumer credit spending.
Stocks in the solar energy sector had a bad day, in the wake of the Israel-based group, SolarEdge Technologies (-27.27% to $82.90). He said he was facing a slowdown in the equipment installation market in Europe.
Other companies in the sector plunged like Enphase Energy (-14.68%) or Sunpower (-8.62%).
© 2023 AFP
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