The Wall Street district of New York (AFP/Archives/ANGELA WEISS)
The New York Stock Exchange remained cautious on Tuesday, moving in dispersed order pending the intervention of the President of the American Central Bank on Friday.
Around 2:05 p.m. GMT, the Dow Jones index dropped 0.12%, the Nasdaq advanced 0.36% and the S&P 500 gleaned 0.14%.
The indices had fallen on Monday, already worried about the attitude of the Fed. The Dow Jones had dropped 1.91%, to 33,063.61 points, the Nasdaq index, 2.55%, to 12,381.57 points, and the broader S&P 500 index, 2.14%, to 4,137.99 points .
“Markets started the week on a sour note, with their worst performance in two months,” said Art Hogan of B. Riley Wealth.
Both the Dow Jones and the S&P 500 have indeed suffered their biggest single session drop since June 16.
In the meantime, the market had experienced a nice rebound, driven by better than expected quarterly corporate results and by a certain optimism envisaging a change of tone for a more flexible monetary policy in the future.
The S&P 500, the index most representative of the American market, had rebounded by 17% and the Nasdaq, dominated by technology, by 22% compared to their low levels in June.
“We are again focusing on the aggressiveness that the Fed could show in order to control inflation,” added the analyst.
“Its president Jerome Powell could clarify this during his highly anticipated speech at the annual symposium in Jackson Hole” (Wyoming), a conference of central bankers.
Wells Fargo analysts said in the Fed chief’s speech, “market participants widely expect his comments to be hawkish, reiterating the need for further interest rate hikes to curb inflation.” .
With almost exactly one month to go until the Fed’s next monetary meeting, market participants now believe by 54.5% that overnight rates will be raised by three-quarters of a percentage point (0.75%), according to the CME Group model based on futures contracts. This is the reverse of what they thought last week.
On the foreign exchange market, the euro continued to evolve below parity against the dollar, at its lowest in 20 years, at 0.9969 dollars for one euro around 1:40 p.m. GMT.
“The economy in the euro zone has shown further contraction for the second time in a row, falling to its lowest level in eighteen months,” noted analysts at Wells Fargo.
The composite PMI index fell to 49.2 in August, its lowest level in 18 months, from 49.9 in July and 52 in June.
– Energy on the rise –
On the bond market, rates on ten-year US Treasury bills remained close to 3%.
Six out of eleven S&P sectors remained in the green, led by energy (+3.15%), while crude prices rose.
Health services (-1.23%), real estate, sensitive to interest rates, lagged (-0.64%).
The department store chain Macy’s climbed 4.19% despite lowering its sales and profit projections for the year. The brand announced better than expected quarterly results, excluding too many stocks through a series of promotions.
Competing chains like Kohl (+4.64%), Nordstrom (+4.61%) and even Gap (+3.93%) were enjoying the momentum.
Zoom, the video conferencing specialist, fell 11.11% to $86.61 as its second-quarter results fell short of expectations and the company lowered its full-year revenue projections.
Zoom, which is valued on the stock market at $25 billion, now expects annual revenue of around $4.40 billion instead of $4.55 billion previously for its staggered 2023 fiscal year.
Twitter stock fell 3.23% to $41.62 as its former security chief accused the social network of covering up vulnerabilities in its protection system and lying about its fight against fake accounts, at the heart of a legal dispute between him and Elon Musk.
© 2022 AFP
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