The three major Wall Street indices at their lowest level of the year
It's a veritable berezina on Wall-Street: the Dow Jones fell 1.70% and closed at its lowest level at the end of the session since the beginning of November 2020, at 28,725.51 points.
The New York Stock Exchange ended lower on Friday with all three major Wall Street indices at their lowest level of the year at the close, a gloomy conclusion to a month of September marked by fears of inflation. #x27;a recession caused by sharp monetary tightening.
The Dow Jones fell 1.70% and closed at its lowest end-of-trading level since early November 2020, at 28,725.51 points. The NASDAQ index lost 1.51%, to its lowest closing since July 2020, at 10,575.61 points, and the broader S&P 500 index fell 1.48%, to 3,585. 62 points.
Septembers are often bad for stocks, reminded Christopher Vecchio of DailyFX.
Since mid-August, the movement has been unidirectional, downward, except for a rebound on hopes of a reversal by the Fed [the American central bank] , which was quickly showered, recalled Edward Moya, from Oanda.
The freezing temperature that had already reigned in the markets for several weeks fell further on Friday with the publication of the PCE (Personal Consumption) price index, the most followed by the Fed.
It was up 0.3% month on month in August, more than the 0.2% expected by analysts. Year on year, inflation reached 6.2%, higher than the 6% forecast but lower than the previous month (6.4%).
This report has echoes the CPI index, another major price index published in mid-September, and reinforces the aggressive posture of the Fed, affirmed Sam Millette, of Commonwealth Financial Network.
Bond yields rose slightly, all the more reason to justify the anguish of investors, who have seen them rise inexorably for several weeks.
The yield on bond bonds US 10-year government bonds came in at 3.81%, compared to 3.78% the previous day.
However, investors noted that consumer inflation expectations surveyed by the University of Michigan for its monthly report showed a slowdown.
They now expect annual inflation to be 2.7% in 5 to 10 years, the lowest since April 2021.
Matthew Martin, of Oxford Economics , also learned from this survey that consumer pessimism [remained] at historic levels regarding the trajectory of economic activity in the medium term.
Investors also noted the increase in consumption in the United States, by 0.4% in gross in August over one month and even by 0.1% adjusted for inflation, the latter indicator being in line with expectations.
To the gloomy environment and the indicators of the day was added the additional noise generated by the transactions carried out on the last day of the month and the quarter, explained Tom Hainlin, of US Bank Wealth Management.
The US Federal Reserve building in Washington
Many managers and institutional investors have thus made adjustments to their portfolios, to essentially unfavorable to equities.
The problem for the market today is not only that the Fed doesn't look like it's ready to stop anytime soon, but also that all of these other risks have been highlighted, according to Christopher Vecchio, who was referring to the intervention of the Bank of England on Wednesday to try to stabilize the British bond market.
Therefore, in the near future, people are likely to feel uncomfortable holding risky or long-maturity assets, according to the analyst.
Technology stocks suffered another downpour, led by Apple (-3.00% to $138.20), which has just lost almost 9% in three sessions, weighed down by the downward revision of its sales forecasts. x27;iPhone in the second half.
Sports equipment maker Nike suffered (-12.81% to $83.12) despite releasing a figure on Thursday quarterly business and net income above expectations. Among the downsides, the weak demand in China and the very high level of stocks, which force the comma brand to grant discounts.
Memory card maker Micron fell between the drops (+0.18% to $50.10) after reporting higher-than-expected net profit for its quarter ended in early September. The group's forecasts for its current quarter nevertheless came out well below analysts' projections, Micron citing a slowdown in demand and a bearish cycle for the sector.
The tobacco company Altria coughed (-1.92% to $ 40.38) after indicating that he was waiving the non-competition clause concluded with the specialist in electronic cigarettes Juul, of which he owns 35% of the capital.
The cruise line Carnival Corporation sank (-23.25% to $7.03), weighed down by a turnover much lower than forecast and by a loss much heavier than expected, following the explosion of its costs. The group nevertheless indicated that reservations for 2023 are at a level higher than the historical average.