untitled design

Mild Wall Rebound – Historic Negative Record Record for Dow Week

The main Wall Street index gained on Friday, with the S&P 500 moving away from the bear market, as investors pulled from a strong session in Asian stock markets, after the decision of the People’s Bank of China to reduce its interest rates.

In particular, the country’s central bank decided to reduce the interest rate on five-year loans by 15 basis points, to 4.45% from 4.6%, in a move to stimulate growth, as it will help reduce the cost of financing for companies in difficulty. The one-year loan interest rate remained unchanged.

Asia-Pacific stock exchanges capitalized on this move today, with Hang Seng in Hong Kong trading 2.9% and Shanghai Composite in mainland China adding 1.9%. In Japan, the Nikkei 225 gained 1.3% and the Kospi in South Korea gained 1.8%.

“News from China and the support of the S&P 500 keep the index out of the bear market. At the moment, we believe that the market has reached its low limit and will not fall further,” he said in a note to customers. Peter Cardillo, economist at Spartan Capital.

Despite the upward movements in the Wall today, the indices are heading towards losses of 3% or more each in the week. The Dow is preparing for the eighth consecutive week with losses, which will be the biggest negative streak since 1932, according to FactSet.

The S&P 500 and Nasdaq are heading for their worst negative streaks since June 2011 and November 2012, respectively. Losses that reflect strong concern about whether the Federal Reserve can curb inflation without derailing the economic recovery.

The recession in the US can not be considered unlikely, as Goldman Sachs points out, with its customers constantly asking what to expect from shares in the event of such a scenario for the economy. Its economists estimate a 35% chance that the US economy will enter recession in the next two years and believe that the yield curve bodes well for a similar contraction.

Stock market indicators suggest that investors are worried about the risk of a recession. The rotation within the US stock market shows that investors are pricing higher chances of recession compared to the strength of recent financial data.

In the meantime, his performance 10-year US government bond fall 5 basis points to 2.848 %%, while the dollar is gaining 0.2% according to the ICE US Dollar.

Indicators – Statistics

On the dashboard, the industrial Dow Jones strengthened by 0.5% over the 31,400 units, the widest S&P 500 adds 0.8% to 3,930 units and the technological Nasdaq records profits close to 1% at 11,500 points.

The S&P 500 is about 18% below its all-time high. If the losses reach and exceed 20%, the index will have passed to the bear market, its first since the sell-off period of the beginning of the pandemic, in March 2020.

Among the 30 shares of Dow Jones, 22 are moving with a positive sign and 8 with a negative. The profits are led by Salesfoce, Nike and Chevron with gains of more than 2%, while the biggest losses are recorded by Boeing (-3.2%) and Caterpillar (-2.1%).

Shares of Ross Stores are sinking 23% after the retailer announced disappointing quarterly results and narrowed its outlook due to persistently high inflation and rising costs in transportation and wages.

Losses of 9.5% for Deere & Co., although the company manufacturing agricultural, construction and forestry machinery announced better-than-expected profits and revenue for the second quarter.

Source: Capital

You may also like

Get the latest

Stay Informed: Get the Latest Updates and Insights

 

Most popular