Wall: Dow endured for a second day – Nasdaq ‘Dive’ 3.9% per week

Only the Dow managed to continue its gains on Friday, while the S&P 500 and Nasdaq returned to the “red”, with investors weighing the increasingly harsh monetary policy announced for the near future by the US Federal Reserve.

The US market started trading with negative signs. Gradually, however, the industrial index reacted and reached up to 250 points. The S&P showed small fluctuations and an exchange of signals to close with losses, while the Nasdaq remained pinned on the “red”, as technology and growth stocks, which are more vulnerable to interest rate changes, were under constant pressure on Friday.

The climate for the Nasdaq was also strained by its performance 10-year US government bond which added 5.9 basis points to 2.713%, the highest level since March 5, 2019, according to Dow Jones Market Data. The 10-year yield climbed 33.9 basis points per week. The 2-year period closed upwards, with its performance adding 5.6 bp. at 2.518%. During the week, it strengthened by 8.8 bp. while in the last 5 weeks it has gained 102.8 bp. marking the largest such increase since the corresponding period ended 22 May 1987.

In the meantime, the dollar added 0.1% on Friday, gaining 1.2% on a 5-day basis, while earlier in the week it reached its highest level since May 2020.

On a weekly basis, all three indices closed with losses. The tone of this 5-day meeting was given by the publication of the minutes from the meeting of the monetary policy committee of the Federal Reserve in March, through which it appeared that its officials plan to reduce its balance sheet by trillions, by selling bonds worth up to 95 billion At the same time, officials are considering one or more interest rate hikes of 50 basis points, if needed for the fight against inflation.

Six to nine months ago, the US Federal Reserve did not seem particularly concerned about the effects of inflation, said Bob Doll, Crossmark Global Investments’ chief investment officer. “Now they are competing with each other over who will be the biggest hawk,” he told Fed officials.

“The fact that the Fed is starting to raise interest rates does not mean that the economy is recovering immediately,” Doll said. He estimated that economic growth will be “okay” this year, even if it slows down compared to 2021, and that inflation, which is running at a high of 40 years, may peak around mid-2022.

Despite the inflation rally, rising interest rates and the Russian invasion of Ukraine – developments that aggravate the investment climate – “the market is enduring,” Doll said.

Analysts estimate that shares will strengthen next week in anticipation of a barrage of strong corporate results for the first quarter of 2022, with the banking sector in focus.

“Investors are betting on positive results as the market has recovered from the climate of uncertainty,” said Peter Cardillo, an economist at Spartan Capital Securities.

The US market is unlikely to return to February lows, “but we see a stagnation in trading as the Fed becomes more aggressive in tackling inflation,” he said.

Indicators – Statistics

On the dashboard, the industrial Dow Jones strengthened by 0.4% or 138 points to 34,721.52, the widest S&P 500 recorded losses of 0.26%, to 4,488.29 points, while the technological Nasdaq fell 1.34% to 13,711.

In the week, the Dow slipped 0.3% in the second consecutive week with losses. The S&P 500 lost 1.3% and the Nasdaq 3.9%, with both indices closing in negative territory after three consecutive 5-day gains.

From 30 shares that make up the Dow, 18 shares closed today with a positive sign, 11 with a negative and one remained unchanged. Home Depot (+ 2.76%), Goldman Sachs (+ 2.3%) and JPMorgan (+ 1.83%) led the gains, while the biggest losses were recorded by Boeing (-1.56%), Salesforce ( -1.49%) and Microsoft (-1.46%).

Tesla fell 3% even though Elon Musk pledged on Thursday to deliver pickup Cybertruck and Tesla Semi in 2023.

The WD-40 strengthened by 7.09% after the maintenance and cleaning company announced a large increase in profits and predicted that high inflation would have little effect on the year ‘s profits.

Finally, Biogen added 1.47%, following the announcement by Centers for Medicare and Medicaid Services, which oversees the Medicare program, that they have finalized their policy to cover the controversial Aduhelm Alzheimer’s disease produced by the company.