The Wall Street district of New York (AFP/ANGELA WEISS)
The New York Stock Exchange opened lower on Monday, the eye on the bond rates which continue to climb, before the meeting of the American central bank (Fed), Tuesday and Wednesday, which should lead to a new marked rate hike.
Around 2:00 p.m. GMT, the Dow Jones lost 0.35%, the Nasdaq index dropped 0.37%, and the broader S&P 500 index, 0.41%.
“The market is plagued by the same issues that got it into trouble last week,” Briefing.com’s Patrick O’Hare commented in a note. “Rates are rising, with concerns that they will lead to a hard landing in the economy, which would greatly reduce the prospects for results” for companies.
The yield on 10-year US government bonds stood at 3.49% on Monday, against 3.44% on Friday.
Even more so than the 10-year benchmark, “everything seems to be moving in tune with the 2-year rate, which follows (investors’) interpretation of where the Fed is heading,” explained Art Hogan of B. Riley Wealth Management. .
This 2-year rate stood at 3.95%, against 3.86% on Friday, its highest level for nearly 15 years (November 2007).
While only a month ago, operators were expecting the Fed to peak at 3.75%, or even 4%, the preferred scenario is now that of a key rate at 4.50%, or even 4.75 % at top of cycle.
“We will know a lot more about the trajectory of monetary policy after the Fed meeting,” said Art Hogan.
The consensus was around a further increase of 0.75 percentage point on Wednesday, which would be the third in a row after June and July and would bring the key rate to a range of 3% to 3.25%.
“In the meantime, investors will remain cautious,” warns Art Hogan, for whom the Fed’s decision should not get the market out of its depression.
“Unfortunately, the only catalysts that can really move it constructively are related to inflation,” he argues, “and we’re going to have to wait almost a month before we get the next CPIs and PPIs,” named major price indices in the United States.
Until then, the indices could continue to sink, even if it means testing the lowest of the year, which date from mid-June, according to Art Hogan.
Taken in this climate of wait-and-see and risk aversion, before the Fed meeting, indices and stocks were moving within narrow margins.
Still suffocated by rising rates, the technology sector continued to suffer, like Alphabet, the parent company of Google (-0.57%), and Microsoft (-0.40%).
The creative software giant Adobe remained poorly oriented (-1.81% to 294.07 dollars), part of the market believing the price offered for the acquisition of the collaborative design platform Figma, 20 billion dollars, to be too high.
Also affected by the preference for assets deemed safe, the cryptocurrency sector was struggling, and Coinbase (-4.92%), Applied Blockchain (-9.07%) and Robinhood (-2.93%) were doing so. expenses.
Oil stocks fell, following the same path as the price of black gold, down sharply on Monday. ExxonMobil (-0.63%), Marathon Oil (-1.83%) and ConocoPhillips (-1.27%) all went into the red.
© 2022 AFP
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