(CercleFinance.com) – Wall Street ends with a heavy weekly decline against the backdrop of overly robust growth (GDP at +4.9%) and still geopolitical uncertainties concerning the Middle East.
The Dow Jones (-1.3%) completed its worst session since March (led by Chevron with -6.7%, Amgen Verizon at -3%).
The S&P500 (-0.48%) completed its worst week since February (-2.53% with 4 sessions of decline out of 5), and October will surely stand out as a 4th consecutive month of decline, with a score close to -4%.
The broad index was weighed down by banks with Bank of America and JP-Morgan and Citizens Financial -3.6%, Citigroup -2.8%.
The VIX associated with it took +3% to finish at 21, just like the previous Friday (‘3 witches’)
The Russell-2000 (-1.2% to 1,637) hits a new annual ‘low’ and has posted -8% since January 1st.
The Nasdaq remained afloat thanks to Intel’s +9.3% and Amazon’s +6.8% but is in line for a 3rd week of decline: Apple loses -2.8% and Meta Platform -3.6 % weekly (despite +2.9% this Friday evening).
Note the positive effect of the Intel surge on the semiconductor sector with Micron +1.7%, Western Digital +1.9%, AMD +3%, Juniper +6.1%.
The heaviness of the equity compartment is coupled with a clear relaxation of long rates: T-Bonds relax by around ten points (towards 4.85%), which seems to reflect precautionary ‘purchases’ of operators well informed of possible developments on the geostrategic scene with rumors of an imminent IDF offensive on the Gaza Strip.
Concurring dispatches report large-scale preparations emanating from the 3 army corps of the IDF Land/Air/Sea: all eyes will now be on Iran and Turkey… and also Egypt.
Another sign of migration towards safe haven assets (return of the ‘risk-off’ on the eve of the weekend), Gold has returned to $2.00 and has gained +10% since the start of the year.
‘WTI’ oil climbed +2% in New York to finish at $85.3, after flirting with +3% to $85.9.
Given the geopolitical context and a recurring reflex of caution on the eve of the weekend, today’s figures only had a relative impact.
Wall Street reacted little to the decline in American consumer confidence in October.
The confidence index finally came out at 63.8, a level significantly higher than its first estimate (63), but down sharply compared to the level of 67.9 reached in September.
The component of the judgment of households surveyed on their current situation thus fell to 70.6, against 71.1 last month, while the component of expectations fell to 59.3, after 65.8 in September.
These latest figures obscure the positive surprise in consumer spending by American households: they increased by 0.7% last month compared to the previous month in the United States, according to the Department of Commerce, an increase greater than expected ( +0.4%), for income growing by 0.3% (the savings rate is falling).
Furthermore, the PCE price inflation index stood at 3.4% on an annual basis, a stable rate compared to that observed in August (i.e. +0.4% sequentially, against a consensus of + 0.3%), but the ‘Core’ PCE (excluding food products and energy) fell slightly from 3.8% to 3.7% from one month to the next.
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