Wall Street: In the red after a three-day weekend

(CercleFinance.com) – Wall Street should open on a bearish note Tuesday morning at the end of a long three-day weekend, affected by the disappointing results of Goldman Sachs and by the persistent tensions on the rates market.

Half an hour before the opening, the ‘futures’ contracts on the major New York indices lost between 0.8% and 1.4%, announcing a start to the session in the red.

Goldman Sachs announced this morning a quarterly profit down 10% and below expectations, as gains in investment banking and wealth management activities failed to offset the decline in capital markets and asset management.

The bank, which lost more than 3% in pre-market trading, should particularly weigh on the S&P 500 financials index.

Another disappointment, the Empire State index, which measures activity in the manufacturing sector in the New York region, fell sharply by 33 points in January, to stand at -0.7.

At the same time, the rise in long-term interest rates – with a ten-year American at a two-year high – rekindled fears of an increase in the cost of corporate financing and the high cost of equity markets.

On the bond compartment, the yield on ten-year Treasuries – a real benchmark for borrowing costs in the United States – is changing, at 1.82%, to its highest since January 2020.

Investors fear that the high level of yields – due to prospects for rate hikes across the Atlantic – will prevent equities from responding positively to the corporate earnings season.

“The key debate right now on Wall Street is whether tech stocks with high valuation multiples can move higher as the Fed becomes more restrictive,” Wedbush Securities analyst Dan Ives wrote today.

According to the professional, market sentiment could change in the coming weeks with the publications of the tech giants, which should highlight particularly favorable prospects.

The stock market rally that carried Wall Street last year has tended to falter since the beginning of the year due to the rise in inflation and the monetary tightening initiated by the Fed.

As a result, safe havens such as Treasuries and gold are the most sought after.

On the oil market, prices are also rising again, with a barrel of Texan light crude up 1.3% to 85.3 dollars.

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