Friday 17th September 2021
Witches Sabbath on Wall Street
Stock market week ends with a minus
Anyone who hoped that stock exchange prices would end the weekend with a plus will be disappointed. After the Dax, the major indices Dow Jones, S & P500 and Nasdaq also closed in the red. This also has to do with the Witches Sabbath.
Wall Street ended trading at the end of the week with price drops. The market has moved in the field of tension between great decline, the so-called “Witches’ Sabbath”, and the continuing concerns about China. In addition, US consumer sentiment was disappointing. Although this rose in August, it remained below the market’s expectations.
Of the Dow Jones Index decreased by 0.5 percent to 34,585 points. Of the S&P 500 fell 0.9 percent that Nasdaq composite also lost 0.9 percent. The volatility in the stock market at the end of the week coincided with a huge option expiration that, according to Goldman Sachs, expired stock options valued at more than $ 750 billion. This was one of the largest expiration dates in the recent past.
Read here how the Dax fared this Friday.
“Market sentiment is mixed as investors currently don’t know what to do with the latest economic data and expectations for the Fed,” said Swissquote analyst Ipek Ozkardeskaya. Data that was stronger than expected seemed more to serve concerns about a faster cutback in asset purchases than to fuel the bulls’ appetites.
The events in China around the staggering real estate giant Evergrande continued to depress the mood. The headline that China is pumping money into the banking system to alleviate fears about the impending Evergrande bankruptcy provided some reassurance, it said in the trade. But China could face a real estate and banking crisis. “This is a flaw in the markets and events are coming to a head, but it’s hard to see how this will play out and if it’s destructive,” said Chris Jeffery of Legal & General Investment Management’s fixed income strategist Chris Jeffery.
Dollar rally continues
Of the dollar continued its recent upward trend. The dollar index gained 0.3 percent and recovered from interim levies. The greenback again benefited from its status as a safe haven in view of declining growth prospects and what is happening in China, it said. The recent good US data would also have helped, as they fuel the assumption that the Fed will soon reduce its monthly securities purchases.
The prices fell on the bond market. The yields on ten-year paper went up for the fourth trading day in a row – the longest profit stretch since March. Capital Economics predicts that long-term bond yields will continue to rise in developed markets, with US Treasuries seeing the largest increase. “This is based on our view that inflation will prove to be more stubborn in the US than in the UK or the EU,” the analysts said.
The capital injections into the Chinese banking system supported base metal prices in the commodity markets. With concerns about an economic downturn in China, prices had recently come under pressure. The gold price has meanwhile been slowed down by rising market interest rates.
the Oil prices gave in. Analysts pointed to more and more US production facilities being restarted after they were shut down by Cyclone Ida. The process is going slowly over the stage, but the US supply is increasing, it said.
For the shares of Biontech (-3.6%) and Pfizer (-1.3%) went down. A group of FDA experts said the agency should not allow Americans to get a third dose of the Covid-19 vaccine from Biontech and Pfizer. The FDA is not required to follow the advice of the committee, but it often does.
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