Countervailing forces on the Wall: Dow ‘sees’ third consecutive record, pressure on technology

LAST UPDATE: 17.50

Mixed signs on Wall Street on Wednesday with the Dow aiming for the third consecutive record in the same number of sessions in early 2022, while the S&P 500 and Nasdaq lost.

Technology shares are under pressure for the second day in a row ahead of the release of minutes from the latest Federal Reserve monetary policy meeting, at which the US Federal Reserve announced plans to accelerate the contraction of its bond-buying program, leaving open the possibility for three increases in US interest rates in 2022. In addition, the rise in US government bond yields at the beginning of the new year (the 10-year added Monday and Tuesday 17 basis points in total) has contributed to the decline in technology and growth stocks.

“The minutes of the last meeting of the Federal Open Market Committee in December could affect the market, as investors are currently focusing on forthcoming interest rate hikes and rising inflation,” said Matthew Tuttle, chief investment officer at Tuttle Capital Management. .

Meanwhile, US private sector job growth continued at a strong pace in December, as shown by the data announced today.

In particular, U.S. companies added another 807,000 jobs in December, according to the ADP Research Institute’s National Employment Report in collaboration with Moody’s Analytics.

Average analysts polled by Reuters polled 400,000 jobs in December. November data were revised downwards to 505,000 positions instead of the 534,000 originally announced.

Today, his performance 10-year US government bond falls by 1.5 basis points to 1.65%, while the dollar notes losses of 0.3%.

Indicators – Statistics

On the dashboard, the industrial Dow adds 0.28% exceeding 36,900 points, o S&P 500 declines by 0.13% to 4,787 units and the technological Nasdaq slips by 0.9% to 15,480.

From 30 shares that make up the Dow, 21 stocks are moving with a positive sign and 9 with a negative. Intel (+ 3.03%), Walgreens Boots (+ 1.5%) and Boeing (+ 1.3%) are leading the gains, while Salesforce (-5.75%) and Microsoft (- 2.23%).

The automotive sector is also in the spotlight, following the Tesla and Ford rallies. Today the former trades at + 0.85% and the latter loses more than 2.5%.

General Motors is set to launch a all-electric Chevy Silverado on Wednesday, but its share is down 1.45%.

Sony, on the other hand, is trading 3.2% higher than $ 132 and is on track for its highest price since April 2000. The Japanese giant announced that it plans to enter the electric vehicle market from the spring of 2022 and founded the company Sony Mobility in order to “investigate a commercial circulation” of electric vehicles. Sony president Kenikiro Yoshinda has unveiled a prototype SUV, the VISION-S 02, which uses the same electric vehicle platform as the VISION-S 01 coupe, which has been on public road testing in Europe since December 2020. .

Beyond Meat shares jump 5% after announcing that the vegetable fried chicken product is coming to KFC stores in the US next week.

Citigroup: Sees the S&P 500 over 5,000 units

Meanwhile, Citigroup analysts have revised upwards their S&P 500 target price estimates for the end of 2022, estimating that it will exceed the level of 5,000 points for the first time, as Citi expects strong corporate profits to continue this year, as reported by Reuters.

The business results of the S&P 500 in 2021 exceeded even the most optimistic estimates of analysts, showing an annual increase in the first three quarters by 52.8%, 96.3% and 42.6% respectively, according to data collected Refinitiv.

For the fourth quarter, Refinitiv places the annual profit growth at 22.3%. In this context, Citigroup analysts revised the target price for the S&P 500 to 5,100 from 4,900 points in October, although they warn that the tightening of monetary policy by the Federal Reserve could create unfavorable conditions for valuations.