The floor of the New York Stock Exchange (GETTY IMAGES NORTH AMERICA/AFP/SPENCER PLATT)
The New York Stock Exchange ended lower on Thursday, suffocated by rising bond yields, which have hit new highs since the 2008 financial crisis.
The Dow Jones lost 0.30%, the Nasdaq index fell 0.61% and the broader S&P 500 index lost 0.80%.
The session had started in the green, supported by a ballet of publications from companies which had, for the most part, surprised analysts favorably.
The caravan notably included IBM (+4.73% to 128.30 dollars), whose quarterly sales and net profit came out above expectations, featuring remote computing (cloud) and infrastructure. The Armonk (New York State) group raised its growth forecast for the full year.
Another action in sight, that of the telecom operator AT&T (+7.72% to 16.74 dollars), which also did better than expected for both its revenues and its profits, driven by its performance in mobile phones.
Also above expectations, the airline American Airlines, which benefited from the acceleration in attendance as well as price increases, which boosted its revenue per passenger. The title, however, fell 3.79% to 13.46 dollars.
But the indices ended up stalling, finally going into the red, and ending down for the second day in a row.
“It’s clearly due to the movements in bond rates”, commented Jack Ablin, of Cresset Capital, “and there could also have been a little movement of capital from the United States to the United Kingdom”, following the the announcement of the resignation of British Prime Minister Liz Truss, which pleased investors.
The yield on 10-year US government bonds rose to 4.23% on Thursday, a first since June 2008, against 4.09% the day before.
As for the 2-year rate, which is generally more sensitive to investors’ expectations regarding the monetary policy of the American central bank (Fed), it reached 4.61%, a 15-year high.
“For a lot of Wall Street right now it’s all about rates,” said Edward Moya of Oanda. “A lot of traders are already looking at (a Fed policy rate of) 5% by the middle of next year. So the economy is going to suffer a lot more and that’s cutting risk appetite.”
Operators now give the scenario of a Fed policy rate at least 5% by next May a probability of 60%, whereas they did not even consider this hypothesis a month ago, according to the model of the CME Stock Exchange.
Faced with this ground swell, the series of satisfecits issued to companies after solid publications is no match.
“Everyone realizes that we have had so many downward revisions to forecasts that it would really take a terrible quarter to miss” the objective set by analysts, argues Edward Moya. “All the good news has already been digested.”
Illustration of this lack of enthusiasm, Netflix slipped Thursday (-1.55% to 268.16 dollars), less than 48 hours after having greatly exceeded market projections and announced a gain of 2.4 million subscribers. net.
Elsewhere on the stock exchange, Tesla (-6.33% to $207.28) tumbled after acknowledging it was unlikely to meet its 2022 delivery targets, a disappointment attributed by the automaker to more logistical difficulties. only to a slowdown in demand, considered “excellent” by general manager Elon Musk.
The mining group FreeportMcMoRan (+2.68% to 29.12 dollars) surfed on higher than expected results, benefiting from a marked increase in its production, which compensated for the drop in the average price of gold and copper.
© 2022 AFP
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