Operators of the New York Stock Exchange (AFP / ANGELA WEISS)
The New York Stock Exchange suffered its third straight loss on Tuesday, worried that the continued strength of the US job market will push the Fed to be more severe in raising interest rates.
According to final results, the Dow Jones index dropped 0.96% to 31,790.87 points, the technology-heavy Nasdaq fell 1.12% to 11,883.14 points and the broader S&P 500 index 1, 10% to 3,986.16 points.
While the indices had started in the green, initially guided by “the desire of investors to take advantage of this decline to buy back at a lower price”, according to Patrick O’Hare of Briefing, the rebound was short-lived. .
The consumer confidence index, calculated by the Conference Board, first showed that consumer sentiment in the United States had started to rise again in August after three months of decline.
This “could help support spending,” Lynn Franco, senior director of economic indicators at the Conference Board, said in a statement. Which wouldn’t help lower the prices. And Ms. Franco underlined that “inflation and additional rate hikes are always risks for economic growth in the short term”.
Then, figures published by the US Department of Labor (JOLTS survey) showed that the number of job vacancies in the United States remained at a very high level, at 11.2 million.
A sign that the labor market remains very tight and that employers probably have to offer higher salaries to attract candidates.
“We understand why investors are worried about this job market which remains very tight. This generally leads to wage increases”, which risks encouraging inflation, Jack Albin told AFP. Cresset.
“Investors are starting to worry about inflation,” he added, noting that on the bond market side, Treasury bond yields were still rising. The rate on 10-year bills stood at 3.10% and that on two-year bills climbed to 3.45%, the highest for 15 years.
“A large part of the bond market is seeing yields go up and that’s putting pressure on equities,” Albin said.
– Towards a long fight against inflation –
To these data were added several comments from officials of the American Federal Reserve (Fed) going in the direction of a long battle to come against inflation.
It will take “a few years” for inflation to return in the United States to the 2% that the American central bank is targeting, John Williams of the New York Fed warned on Tuesday, stressing that overnight rates will continue to be raised to curb this price increase.
“The situation is very difficult. Inflation is very high. The economy is facing a lot of obstacles. I think it will take a few years, but we will get there,” he added.
Investors are awaiting official employment figures for August on Friday after the unexpected jump of half a million hirings in July. Analysts expect 300,000 new job creations and a stable and still historically low unemployment rate of 3.5%.
On the stock side, the energy sector (-3.36%) led the decline reflecting fears of recession that drove the oil market. The barrel of Brent ended down 5.50% below the 100 dollar mark. Exxon Mobil dropped 3.81%, Chevron 2.44%.
The chain of electronics stores Best Buy climbed 1.61%, after the publication of quarterly results, however mixed, but better than expected and above all those for the same period in 2019, before the pandemic.
Among other stocks of the day, Twitter fell 1.80% to $39.32 as Elon Musk cited in a new letter accusations made by the company’s former security chief, Peiter Zatko, for justify with additional arguments the abandonment of its takeover project.
The very volatile and speculative action in recent weeks of Bed Bath and Beyond, another chain of stores, lost 9.29% after starting the session sharply higher, on the eve of a presentation by the management of the strategy. of the group.
Snap, the parent company of popular messaging app Snapchat, fell 2.53% to $10.01. The company, which had announced heavy losses at the end of July in the second quarter, is preparing, according to the specialized website The Verge, to lay off 20% of its workforce. The title has lost almost 80% on the stock market this year.
© 2022 AFP
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