A New York Stock Exchange operator (GETTY IMAGES NORTH AMERICA/AFP/SPENCER PLATT)
The New York Stock Exchange was down very sharply on Thursday, recovering from the euphoria that followed Wednesday’s announcement of a marked increase in the Fed’s rate and the comments of its president.
Around 3:20 p.m. GMT, the Nasdaq was in dire straits, dropping 4.51%, while the Dow Jones yielded 2.87% and the broader S&P 500 index, 3.36%.
The tone contrasted with the enthusiasm that had swirled through the end of Wednesday’s session, sparked by comments from U.S. central bank (Fed) Chairman Jerome Powell more than the Fed’s key interest rate hike of half a point, already largely priced in by investors.
The official notably ruled out the prospect of a 0.75 percentage point hike at a future meeting, while operators had so far assessed the probability of such a scenario at 99% at the next meeting of the Fed, in June.
However, after this collective relief, “the market is waking up and realizing that none of the structural problems that have brought it down have been resolved,” said Adam Sarhan of 50 Park Investments.
“Inflation remains high, he detailed, the Fed will continue to raise its rates and the picture of slow growth has not changed.”
Caught in the current seller, the American tech giants fell back massively, like Apple (-4.19%), Microsoft (-4.79%) or Amazon (-7.13%). Since the publication of its results, a week ago, the latter has lost nearly 20% and erased more than 280 billion dollars of capitalization.
The VIX index, which measures market volatility, jumped more than 21%.
The indices were not helped by two bad indicators, the first pointing to a slight increase, above expectations, in weekly jobless claims, the other a decline in productivity in the United States in the first quarter .
On the bond market, after having suddenly relaxed in the wake of Jerome Powell’s press conference, rates rose again on Thursday.
The yield on ten-year US government bonds thus crossed the symbolic threshold of 3%, which it had already crossed briefly on Monday, for the first time since the end of 2018.
For Adam Sarhan, investors fear to witness a “recession of the results” of companies listed on Wall Street, a variation of the economic slowdown already at work in the United States.
A feeling fueled by the cautious, even frankly pessimistic forecasts of several companies which published their quarterly results on Wednesday and Thursday, in particular in the e-commerce sector.
The online sales site eBay thus fell (-9.08% to 49.48 dollars) despite sales and earnings above the Wall Street consensus, observers mainly retaining the group’s projections for the second quarter, lower than those of the market.
The e-commerce platform Shopify also collapsed in early trading (-16.88% to 403.54 dollars), after the publication of a turnover much lower than expected, as well as a loss significantly higher .
Twitter benefited (+3.61% to 50.83 dollars) from the communication of Elon Musk, who managed to raise seven billion dollars from investors to finance the takeover of the platform.
This sum, collected from funds and wealthy investors such as the entrepreneur Larry Ellison or the Saudi prince Al-Walid ben Talal, will make it possible to reduce the amount borrowed from banks for the operation.
Snap (-8.60%), Meta (parent company of Instagram, -6.48%) or Alphabet (parent company of YouTube, -4.70%) went into reverse after their fiercest competitor, TikTok, revealed on Wednesday that it would set up an advertising revenue sharing system with the platform’s most popular creators.
© 2022 AFP
Did you like this article ? Share it with your friends with the buttons below.
