(CercleFinance.com) – US stocks opened lower on Friday morning, continuing their trend from the previous day despite better than expected employment statistics.
At the end of the morning, the major New York indices nevertheless manage to limit their losses, with a decline of less than 0.5% for the Dow Jones and around 0.7% for the Nasdaq.
Wall Street nevertheless extends its bearish streak from Thursday’s session, which saw the Nasdaq plunge 5% under the influence of a rise in bond yields and fears of an economic slowdown.
“Market sentiment is weakening as investors see a combination of economic risks coming as the Fed begins its most aggressive tightening cycle in 22 years,” commented Wells Fargo teams.
The VIX US market volatility index stands above 32,
nearly double its level at the beginning of April.
The US stock markets are not benefiting from the statistics published in the morning, which confirm the good resistance of the US economy to the unfavorable context of the moment.
The Labor Department this morning reported the creation of 428,000 nonfarm payrolls in April, higher than the consensus of 400,000.
Investors fear, however, that these solid figures support, or even encourage, the Federal Reserve in the tightening of its monetary policy.
As a result, government bond yields, whose sharp rise is at the origin of the recent equity market correction, are reaching new peaks.
On the bond compartment, the ten-year American stands at 3.11%, a new high since the fall of 2018.
The rise in interest rates – which may well slow down economic growth – does not lead to a rise in the dollar, nor even a drop in commodity prices since the barrel of WTI crude has gained 2% to more than 110 dollars.
On the equities side, the general downward movement primarily affects
stocks related to basic materials (-1.7%), telecoms (-1%) then financials (-1%).
At the individual stock level, Under Armor fell more than 22% after warning that its margins would erode in its new fiscal year due to soaring inflation and transport costs.
Goodyear dropped 5.5% after having nevertheless signed its best first quarter turnover in 10 years despite current supply problems, the war in Ukraine and confinements in China.
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