(CercleFinance.com) – Wall Street ended with a heavy weekly decline against the backdrop of too robust American GDP growth (+4.9% annualized in the third quarter) and continued geopolitical uncertainties regarding the Middle East .
The Dow Jones (-1.12%) completed its worst session since March on Friday (led by Chevron at -6.7%, Amgen and Verizon at -3%).
The S&P500 (-0.48%) completed its worst week since February (-2.53% with four sessions of decline out of five), and October will surely stand out as a fourth consecutive month of decline, with a score close to -4%.
The broad index was undermined by banks with Bank of America, JPMorgan Chase and Citizens Financial at -3.6%, and Citigroup at -2.8%. The VIX associated with it took +3% to finish at 21, just like the previous Friday (‘3 witches’).
The Russell-2000 (-1.21% to 1,637) hit a new annual ‘low’ and posted -8% since January 1st.
The Nasdaq (+0.38% Friday) remained afloat thanks to Intel’s +9.3% and Amazon’s +6.8%, but experienced a third week of decline: Apple lost – 2.8% and Meta Platform -3.6% weekly (despite +2.9% this Friday). 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 was coupled with a clear relaxation of long rates: T-Bonds relaxed by around ten basis points (towards 4.85%), which seemed to reflect ‘purchases of precaution’ with the prospect of an imminent offensive by the Israeli army in the Gaza Strip.
Another sign of migration towards safe haven assets (return of the ‘risk-off’ on the eve of the weekend), gold 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 thus reacted little to the drop in the UMich American consumer confidence index, which ultimately came to 63.8, a level significantly higher than its first estimate (63), but down sharply from 67.9 in september.
These latest figures obscured the positive surprise in household consumption expenditure in the United States: they increased by 0.7% last month, an increase above expectations, for incomes up 0.3%.
Furthermore, the PCE price inflation index stood at 3.4% at an annual rate, a stable rate compared to that observed in August, 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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