Strong losses on Wall Street as well – Dow loses 30,000 points

The main indicators of the American market are marked by heavy losses with yesterday’s gains, as after the initially warm welcome of the giant increase of the Fed interest rates, the worries for the forthcoming recession seem to return.

In particular, the Dow Jones industrial average is now losing all 30,000 points having fallen to a low of more than 12 months, moving with losses 740 units the 2.4% at 29,925 units.

Similarly, the enlarged S&P 500 is falling by 3% and is located at 3,674 unitswhile once again the biggest pressures are exerted on the technologically weighted Nasdaq located on 10,706 units with a dive 3.5%.

The market yesterday showed enthusiasm when it heard the Fed’s biggest rate hike since 1994, at a beastly 0.75%, while bond pressures eased as the 10-year US yield fell 20 basis points.

For his part, Federal Reserve Chairman Jerome Powell said: “Clearly an increase of 75 basis points is unusually large and I do not expect movements of this magnitude to become commonplace,” but added that an increase of 50 or 75 basis points possible “at the next meeting in July.

However, the euphoric climate did not last long as the Fed followed in the footsteps of other countries’ central banks, reiterating concerns about whether a simultaneous global drain on liquidity would allow the Fed to catch up with inflation. without causing a recession in the world’s largest economy.

In particular, the central bank of Switzerland announced today the first increase in interest rates after 15 years, by 50 basis points in fact, while in England the BoE increased its own by another 25 basis points.

“It’s time to get out of this artificial world of huge liquidity injections where we all get used to zero interest rates and do stupid things, either investing in market parts we should not invest in, or investing in the economy in ways that make no sense.” , Allianz’s chief investment consultant Mohamed El Erian told CNBC yesterday.

“We are coming out of this regime and the road will have potholes,” he said.

In this climate, bond yields quickly picked up again, with the 10-year US now at 3.43%, while the 2-year yield is at 3.27%, a breath away from the 3.46% of the 30-year, approaching the so-called reverse of the curve that usually foretells an impending recession.

Despite the relief rally yesterday, with the lion’s share for the technologically weighted Nasdaq, the sellers returned to the technology titles already from the pre-conference transactions.

“There is an amazing level of sales in technology right now,” Jim Kramer of CNBC wrote in a tweet in the morning in Greece. “It takes your breath away to watch the sellers quickly get rid of their best tech stocks at 5 p.m.”

Thus, Apple moves in the session with a fall of 3%, Microsoft loses 2.2%, Amazon moves to -3.5%, its parent company Facebook Meta to -4%, Netflix to -3.4%, Google parent company Alphabet at -1.4%, while Tesla is diving 5.8%.

Characteristically, in the high capitalization of Dow Jones only 3 stocks maintain a positive sign (Procter & Gamble, Boeing and Walmart) and those with odds up to + 0.2%, while American Express loses 4.9%, and Intel, Walgreens , Goldman, Dow Inc, Caterpillar, Nike, Chevron, all over 3%.

On the other hand, in the macroeconomic news of the day, the labor market seemed to maintain its momentum, albeit at a slightly slower pace, as new unemployment benefit applications fell less than expected, to 229,000 compared to estimates for 215,000.

The manufacturing activity in the Fed Philadelphia’s area of ​​responsibility caused a negative surprise, with the relevant index of the bank slipping to -3.3 from 2.6 last month, while the estimates predicted an increase to 4.8.

Finally, new US housing construction fell more than expected in May, bringing to the fore the impact of supply chain problems and a slump in sales amid rising interest rates.

In particular, home openings fell 14.4% last month to 1.55 million, slipping to a low of more than 12 months,