New decline on Wall Street, which revises its hopes for rapid rate cuts

The New York Stock Exchange closed a third session of decline in a row on Wednesday, readjusting its optimistic outlook for a rapid rate cut from the American Central Bank (Fed) after stronger than expected economic data.

The indices, which lost more during the session, finally concluded with a decline of 0.25% for the Dow Jones at 37,266.67 points.

The technology-dominated Nasdaq lost 0.59% to 14,855.62 points and the S&P 500 fell 0.56% to 4,739.21 points.

Bond rates continued to rise, reaching a one-month high of 4.10% for ten-year bonds.

The markets first digested strong retail sales in the United States in December. These increased by 0.6% instead of the expected +0.4%.

“Between this dynamic figure and recent comments from Fed members urging caution before counting on a rate cut, for me, an interest rate cut in March is now out of the question,” said Peter Cardillo of Spartan Capital.

Within the market, bets on a Fed rate cut as early as March fell to 56% from 80% last week, according to the CME FedWatch tool which is based on futures contracts.

The decline in stocks reflects the fact “that the market is readjusting after the euphoria of the idea of a rate cut in March”, explained Mr. Cardillo.

In addition to retail sales which showed a still enthusiastic consumer at the end of the year, industrial production for its part maintained a positive note in December (+0.1%).

In the second part of the session, the Fed’s Beige Book – an economic report published two weeks before the next meeting of the Monetary Committee of the Federal Reserve – noted stable or even slightly growing activity for eight out of twelve regions.

The job market is rebalancing after more than two years of labor shortage, according to this report.

“This latest delivery of the Beige Book reveals a more dynamic estimate of the economy than in November,” assured Nancy Vanden Houten of Oxford Economics.

On the value side, Boeing recovered 1.27% after having plunged by almost 8% the day before.

The FAA, the air regulation agency, indicated that it had inspected around forty Boeing 737 MAX 9s, which remain grounded for the moment, after the incident of the door detached in mid-flight on Alaska Airlines.

Tesla lost 1.98%, after the electric manufacturer lowered the price of some of its models in several European countries including France, Germany, the Netherlands, Norway and China.

Spirit Airlines collapsed by 22.47% to 6.14 dollars after already a black session the day before, following a court decision which, in the name of respect for competition, refused the takeover project by the low-cost airline JetBlue (-8.67% to $4.68).

The brokerage giant Schwab lost 1.34% after quarterly results in decline, as did its turnover and the volume of its deposits.

The American company Albermale, producer of essential elements and minerals for various industries, lost 4.17% to $120.70.

The world’s leading lithium producer has announced investment reductions and restructuring with staff cuts, after a drop in lithium prices.

Among other Dow Jones heavyweights, Caterpillar, the construction equipment specialist and the Walgreens pharmacy chain lost 3%.

TuSimple (-46% to $0.38), a Californian autonomous driving start-up for trucks, announced that it was withdrawing from Nasdaq trading.