Wall Street: Heaviness prevails, decline close to -3% weekly


(CercleFinance.com) – The week ends on Wall Street with a consolidation without intensity but which demonstrates the difficulty of maintaining initial gains and the ‘friable’ nature of the market, in the absence of sufficiently determined buyers: the week ends with a decline of -3%

The Dow Jones lost 0.3%, the Nasdaq index -0.1% (Tesla with its -4.25% is responsible) and the index, S&P 500 -0.23%… and the Russell -2000, with -0.3%, completes the erasure of its remaining annual gains: back to square one, 9 months for nothing!

The yield on T-Bonds fell but not enough (-4.5 points to 4.44%, compared to 4.495% Thursday evening): the ’10 year’ ended the week beyond its previous record of 4 .36%, on a deterioration of 9 Points which bodes poorly for the future of events.

Moreover, Michelle Bowman, recently appointed as a member of the FED ‘board’, said she expects a new rate increase in the coming months: she is therefore part of the majority which favors the fight against inflation, at the risk of bursting numerous debt bubbles.

The President of the Boston Fed, Susan Collins, made the same speech indicating that ‘further tightening is clearly not to be ruled out’.

The day’s indicators confirmed the resilience of the American economy:
the composite PMI index (all sectors combined) remains expanding (at 50.1, i.e. above the shift in a recession scenario).
What a difference with the mediocre PMIs published in Europe: the HCOB composite flash PMI index of overall activity stood at 47.1 in September after 46.7 the previous month, thus signaling a 4th consecutive monthly decline in private sector activity.

The deterioration in the ‘services’ sector continues for the 4th consecutive month and this seems to augur a recession that the markets refuse to envisage.

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