In a session marked by sharp changes, Wall’s reaction “deflated” in the end and buyers failed to reverse the negative climate, with the three main indicators closing with losses. The Dow Jones failed to contain intra-conference gains, eventually losing 4 points, while the pressures in the technology sector prevailed, keeping the S&P 500 and Nasdaq “stuck in the red”, in a week with a negative sign for the American market.
Investment interest was focused today on the data announced for the new jobs in the USA in December, which did not meet the estimates of the analysts, in a sign that the recent outbreak of the coronavirus cases due to the highly contagious Omicron mutation is starting to burden economic activity.
The weaker data, however, is estimated to lack the momentum to derail the US Federal Reserve’s intention to reduce tapering and accelerate interest rate hikes in 2022 to tame inflation.
In particular, the American economy continued to create new jobs in December, leading to further reductions in unemployment, adding another 199,000 jobs at the end of the year, but losing analysts’ estimates of 400,000 in a Reuters poll.
The unemployment rate, meanwhile, fell to 3.9% from 4.2% last month, with analysts expecting a smaller drop to 4.1%.
Government figures for November were revised upwards showing 249,000 jobs out of the 210,000 originally announced.
“The weaker-than-expected employment report came as a surprise, but we remind investors that the monthly job numbers will be revised in the coming months,” said Jay Pestrichelli, CEO of ZEGA Financial.
“US employers have to pay to get people back into the workforce, and this is something the Fed will consider when focusing on its schedule for the first rate hike,” said Michael Hewson, chief analyst at CMC. Markets UK.
Omicron poses “challenges” for the workforce that are not fully reflected in the employment report, as the spread of the mutation intensified after the data were collected for the report, warned Luke Tilley, chief economist at the Wilmington Trust. “This is a very tight job market,” he added.
Meanwhile, gradual interest rate increases this year and faster reduction of the central bank’s balance sheet, compared to the last time he did it, wants the president of the Federal Reserve of San Francisco, Mary Daly.
“They would rather adjust the interest rate gradually and cut the balance sheet earlier than in the previous cycle,” Daly said during the annual meeting of the American Economic Union, which was held via video conference.
It is noted that the publication -on Wednesday- of the minutes from the last meeting of the Federal Open Market Committee (FMOC) of the Fed, according to which there was intense discussion among officials not only to accelerate the reduction of interest rates, but also to shrink the balance sheet of the Federal Reserve, amounting to 8.8 trillion. was crucial to Wall Street’s weekly losses.
“The market reaction has shown that some at Wall were surprised by the Fed’s record.
The rise in bonds was another factor that pushed the tech industry this week. His performance 10-year US government bond strengthened on Friday by 3.6 bp. at 1.769%, while in the week it added 27.3 bp. at its biggest rise on a 5-day basis since September 2019, according to Dow Jones Market Data.
The dollar lost 0.6% on Friday, while in the week it recorded losses of 0.2%.
Indicators – Statistics
On the board, the Dow fell marginally to 36,231.66 points, the widest S&P 500 lost 0.41% to 4,677.03 points and the technological Nasdaq slipped 0.96% to 14,935.90 points.
In first week of 2022 all three indices closed with losses. The Dow fell 0.3%, the S&P lost 1.9%, while the biggest drop was recorded by the Nasdaq, with a “dip” of 4.5%, in its worst week since February 2021.
From 30 shares that make up the Dow, in today’s session 20 closed with a positive sign and 10 with a negative. Wallgreens Boots (+ 2.67%), Travelers Cos (+ 2.43%) and Honeywell (+ 2.34%) led the gains, while Home Depot (-3.01%), Nike recorded the biggest losses. (-2.56%) and United Health Group (-2.35%).
Gap was in the spotlight today after the announcement of Kanye West’s partnership with luxury product company Balenciaga for a Yeezy collection to be available at Gap. GAP shares fell 2.37%.
Boot Barn added 0.59%, after the retail company pre-announced the results for the third quarter of the financial year, which are better than expected.
CinCor Pharma debuted on the Nasdaq on Friday, with the biopharmaceutical stock available at $ 16, averaging between $ 15 and $ 17 in the initial public offering.
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I am Sophia william, author of World Stock Market. I have a degree in journalism from the University of Missouri and I have worked as a reporter for several news websites. I have a passion for writing and informing people about the latest news and events happening in the world. I strive to be accurate and unbiased in my reporting, and I hope to provide readers with valuable information that they can use to make informed decisions.
