(CercleFinance.com) – The heaviness imposed itself on Wall Street but the bets were made question scores after 2 hours of quotations.
Wall Street’s bearish acceleration at the start of the session was quickly contained and the declines are staggering -41% on the Dow Jones fell 0.98%, -1.38%, on the S&P500 (at 4,513, 4,500 are preserved) and the Nasdaq Composite drops 2.17% (to 13,973.45 points, which remains close to 14,000, the low of July 21 and 24).
The Nasdaq-100 (-2.2% to 15,370) was weighed down by Broadcom -3%, Microchip -3.3%, Adobe -3.4%, ASML -3.6%, Micron -3.7%, Intel -4%, Zoom -4.2%, Nvidia -4.8%, Lucid -5%, Datadog -7.1%.
The semiconductor sector (SOXX index) posted a heavy decline of -3.8%.
The downgrading of US debt by Fitch Ratings, which withdrew its ‘AAA’ rating, did not cause an ‘icy shower’ effect like in early 2011 when Standard & Poors lowered its rating to AA+.
On the other hand, this upsets the bond market with returns back above 4% for 10-year T-Bonds: +5.5 Pts to 4.09% (after a zenith at 4.125%).
It is still the worst closing since November 5, 2022.
The FED will indeed try to carry out the largest issuance program in its history with 1,800 billion (including $1,000 billion between July and September) by the end of 2023, while tax revenues have fallen to their lowest level since end of 2008 (in the meantime there were several tax reforms very favorable to the ultra-rich).
Investors also seem perplexed by the ADP survey, which once again thwarts forecasts with a stronger than expected increase in job creations in the private sector in the United States: +324,000 in July, a figure well above expectations. (from +170 to +180,000) according to the monthly survey published on Wednesday by ADP, a specialist in the outsourcing of human resources management.
Job creations remained robust, in the leisure and hotel industries, losses were recorded in industry, which suffered from the rise in interest rates.
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