Reuters 6/16/22
June 16, 2022
Wall Street happily welcomes the Fed’s determination
June 18, 2022New York (AFP) – The New York Stock Exchange was moving in dispersed order on Friday, the day after a nightmarish session, deprived of a rebound by several bad indicators, which confirm the slowdown in the American economy.
Around 2:25 p.m. GMT, the Dow Jones lost 0.30%, the Nasdaq index, dominated by technology stocks, took 0.47%, and the broader S&P 500 index lost 0.14%.
“We are looking for a rebound, but we must expect a lot of volatility, because it is the last day of options” for the month of June, these financial products which allow you to bet, up or down, on the evolution of indices or stocks, explained Peter Cardillo of Spartan Capital Securities.
Witness, during the few minutes following the opening, the indices oscillated between red and green, before taking more clearly the direction of an increase.
After a session that saw the Dow Jones finish at its lowest level in nearly 18 months on Thursday, Wall Street was struggling to move forward, the semblance of momentum dampened by several poor figures published on Friday.
New York (AFP) – The New York Stock Exchange was moving in dispersed order on Friday, the day after a nightmarish session, deprived of a rebound by several bad indicators, which confirm the slowdown in the American economy.
Around 2:25 p.m. GMT, the Dow Jones lost 0.30%, the Nasdaq index, dominated by technology stocks, took 0.47%, and the broader S&P 500 index lost 0.14%.
“We are looking for a rebound, but we must expect a lot of volatility, because it is the last day of options” for the month of June, these financial products which allow you to bet, up or down, on the evolution of indices or stocks, explained Peter Cardillo of Spartan Capital Securities.
Witness, during the few minutes following the opening, the indices oscillated between red and green, before taking more clearly the direction of an increase.
After a session that saw the Dow Jones finish at its lowest level in nearly 18 months on Thursday, Wall Street was struggling to move forward, the semblance of momentum dampened by several poor figures published on Friday.
Industrial production only rose by 0.2% in May compared to April, less than the 0.5% expected by economists.
Another disappointment, the production capacity utilization rate increased only very modestly, to 79.0% (78.9% in April), against 79.3% expected.
The picture was further darkened by the Conference Board Institute survey, which revealed that 76% of the 750 bosses questioned considered either that a recession was looming on the horizon, or that it was already effective.
“Demand must fall to calm inflation,” reacted Jack Ablin, De Cresset Capital. “So anything that can lower bond rates is going to help equity markets.”
Bond rates also eased slightly, the day after a day marked by high volatility.
The yield on 10-year US government bonds stood at 3.28%, against 3.30% the day before.
“Investors want to see inflation slow and, at the same time, no deceleration in demand,” the analyst continued. “But it’s an impossible combination.”
Companies are beginning to integrate this slowdown in American economic activity more and more ostensibly and, like Adobe on Wednesday after the stock market, are revising their forecasts downwards.
The software publisher, sanctioned Friday (-2.45% to 356.12 dollars), forecasts a turnover and a net profit lower than the figures announced so far, in particular because of the consequences of the war in Ukraine and the impact of the soaring dollar.
“It’s impossible to imagine an economy that slows down with consumption without having a negative effect on corporate results,” said Gregori Volokhine, of Meeschaert Financial Services.
For Peter Cardillo, there will be no conclusions to draw from Friday’s session, which comes after another hectic week. “Whatever happens today won’t mean much.”
At the rating, the steelmaker US Steel (+2.04% to 19.98 dollars) benefited from forecasts, published Wednesday after the close, of profits well above analysts’ expectations.
The group said rising steel prices were more than offsetting soaring energy costs.
US Steel took part of the sector in its wake, notably Steel Dynamics (+2.06% to 71.31 dollars).
The Chinese online commerce giant Alibaba was wanted (+ 1.56% to 103.03 dollars), while, according to Reuters, the Chinese regulator would have authorized its financial services subsidiary Ant Group to create a financial holding company, crucial step in view of a possible listing.
Two days after filing for bankruptcy, the cosmetics group Revlon took off (+97.81% to 3.85 dollars) following the publication of an article in the daily Economic Times reporting the interest of the Indian conglomerate Reliance Industries for a possible takeover.
The WWE group, which manages the wrestling circuit World Wrestling Entertainment, was sanctioned (2.94% to 62.96 dollars) after the announcement of the temporary withdrawal of its emblematic boss, Vince McMahon, subject of an investigation about an affair with an employee.
Industrial production only rose by 0.2% in May compared to April, less than the 0.5% expected by economists.
Another disappointment, the production capacity utilization rate increased only very modestly, to 79.0% (78.9% in April), against 79.3% expected.
The picture was further darkened by the Conference Board Institute survey, which revealed that 76% of the 750 bosses questioned considered either that a recession was looming on the horizon, or that it was already effective.
“Demand must fall to calm inflation,” reacted Jack Ablin, De Cresset Capital. “So anything that can lower bond rates is going to help equity markets.”
Bond rates also eased slightly, the day after a day marked by high volatility.
The yield on 10-year US government bonds stood at 3.28%, against 3.30% the day before.
“Investors want to see inflation slow and, at the same time, no deceleration in demand,” the analyst continued. “But it’s an impossible combination.”
Companies are beginning to integrate this slowdown in American economic activity more and more ostensibly and, like Adobe on Wednesday after the stock market, are revising their forecasts downwards.
The software publisher, sanctioned Friday (-2.45% to 356.12 dollars), forecasts a turnover and a net profit lower than the figures announced so far, in particular because of the consequences of the war in Ukraine and the impact of the soaring dollar.
“It’s impossible to imagine an economy that slows down with consumption without having a negative effect on corporate results,” said Gregori Volokhine, of Meeschaert Financial Services.
For Peter Cardillo, there will be no conclusions to draw from Friday’s session, which comes after another hectic week. “Whatever happens today won’t mean much.”
At the rating, the steelmaker US Steel (+2.04% to 19.98 dollars) benefited from forecasts, published Wednesday after the close, of profits well above analysts’ expectations.
The group said rising steel prices were more than offsetting soaring energy costs.
US Steel took part of the sector in its wake, notably Steel Dynamics (+2.06% to 71.31 dollars).
The Chinese online commerce giant Alibaba was wanted (+ 1.56% to 103.03 dollars), while, according to Reuters, the Chinese regulator would have authorized its financial services subsidiary Ant Group to create a financial holding company, crucial step in view of a possible listing.
Two days after filing for bankruptcy, the cosmetics group Revlon took off (+97.81% to 3.85 dollars) following the publication of an article in the daily Economic Times reporting the interest of the Indian conglomerate Reliance Industries for a possible takeover.
The WWE group, which manages the wrestling circuit World Wrestling Entertainment, was sanctioned (2.94% to 62.96 dollars) after the announcement of the temporary withdrawal of its emblematic boss, Vince McMahon, subject of an investigation about an affair with an employee.
