steel sector in demand
Dow Jones ends turbulent week below 30,000
06/17/2022, 10:25 p.m
The Dow Jones is unable to shake investors’ fears of a recession. Due to the immensely high inflation in the USA and fears of a strong economic slowdown, the leading US index cannot really recover.
The leading US index Dow Jones Industrial ended an extremely dreary week on the stock market below the 30,000 point mark. Of the dow closed 0.13 percent lower at 29,888.78 points. The market breadth S&P 500 increased by 0.22 percent to 3674.84 points on the last trading day of the week. The technology stocks held up better Nasdaq 100 recovered by 1.24 percent to 11,265.99 points.
The fear of a recession had weighed heavily on the stock exchanges in the days before. The US Federal Reserve had raised interest rates by 75 basis points in the fight against inflation. This makes credit for investment and consumption more expensive, which in turn could slow down the upturn in the world’s largest economy. “Markets will not calm down until there is a sense that actions by the Fed and other central banks will be successful not only in curbing inflation but also trying to prevent a global recession,” said Kenny Polcari, Managing Partner at the consulting firm Kace Capital.
Persistent concerns about the economy caused oil prices to fall sharply. The North Sea variety Brent lost up to 6.5 percent to $112.00 a barrel, US light oil (WTI) fell 7.6 percent to $108.63. Industrial metals such as copper and zinc also became cheaper.
Bond investors reacted with relief to statements by ECB boss Christine Lagarde on the planned limitation of yield differences (spreads) on European government bonds. According to insiders, she explained the recently announced so-called “anti-fragmentation tool” to euro-zone finance ministers behind closed doors. The yield of ten-year federal bond fell to 2.3 percent. The spread between these papers and their Italian counterparts and these papers on the fell to the lowest level in almost two weeks. US Treasuries returned 3.231 percent from 3.305 percent previously.
Investors mainly turned to technology stocks, which had recently lost heavily. So stood Tesla 1.6 percent higher. In contrast, stocks from the S&P energy sector fell in the wake of lower oil prices. Stocks of the oil company chevrons lost more than four percent. Steel stocks were among the favorites after an encouraging outlook of US Steel. The company forecast surprisingly high earnings of $3.83 to $3.88 per share for the current quarter. US Steel’s shares rose 1.6 percent, as did its competitor Nucor increased by up to 1.25 percent.
Mereo shares were driven by takeover fantasies BioPharma up 62 percent to $1.30. The British edition of The Time reported that pharmaceutical giant AstraZeneca is considering a bid for the UK-based drug developer. Mereo is looking for cures for rare diseases and certain types of cancer. Stockbrokers still expected trading to be volatile overall on Friday, due to the expiry of options on the futures markets and the long weekend with a holiday-related break in trading on Monday.