Wall: Indicators at ‘red’ at the close of a difficult quarter

The main stock indices on Wall Street recorded mild losses, which are heading towards the end of their first quarter losses for two years.

On the dashboard, the industrial Dow Jones falls by 150.83 points or 0.43%, the widest S&P 500 by 14.43 points or 0.32%, while the technological Nasdaq “loses” 73.55 points or 0.51%.

Walgreens Boots Alliance shares fall 6%, a “burden” for Dow, with the pharmacy chain exceeding its forecasts for the results for the second quarter, but mainly due to sales of products related to the pandemic of coronavirus.

Technology stocks are under pressure, mainly due to the restrained analysts’ estimates for the future of the PC market.

More specifically, the shares of AMD, HP and Dell record losses from 3% to 5.5%, after the review of their status by Barclays (for the first) and Morgan Stanley (for the other two) in equal weight from overweight .

Shares rallied in the second half of March, with the S&P 500 and Nasdaq gaining near monthly gains of close to 5%, while the Dow gained 4% for March.

However, on a quarterly basis, the Dow and S&P 500 are down 3%, while the Nasdaq is losing more than 7%. This will be the first quarter of losses for the three indicators from the first quarter of 2020, in which the coronavirus pandemic in the USA began.

“There has been a good relief rally, with investors looking beyond the war in Ukraine, as there is a lot of money on the sidelines,” said Erik Knutzen, head of investment at Neuberger Berman.

“From now on, however, investors are expected to realize that growth is slowing, interest rates are rising, inflation is still rising. This environment poses particular challenges for the equity industry,” he added.

Oil prices are falling today, following the decision of the government of US President Joe Biden to put 1,000,000 barrels per day on the market from the country’s strategic reserves for a period of about six months.

In Ukraine, Russian forces continue to maintain their positions around Kyiv and strike in the Ukrainian capital, according to British intelligence. Russian President Vladimir Putin has signed a decree requiring payments to buy Russian gas from foreign buyers to be made in rubles.

Of the 30 Dow shares, 13 are positive and 17 are negative. The profits are led by those of Merck, Amgen, Cisco while those of Walgreens Boots Alliance, Intel and Home Depot.

Macro

The US inflation rally continued in February, with the index for the personal consumption expenditure, the Federal Reserve’s preferred index of inflation, to strengthen 0.6% from the previous month, according to data that saw the light of day today.

Compared to February 2021, the index climbed 6.4%, after the jump in January by 6.2%. This is the largest increase since January 1982.

The structural index, which does not include food and energy, increased by 0.4% in February from the previous month, while on an annual basis the increase was 5.4%, from 5.2% in January. This is the largest increase since 1983.

The Fed considers the Consumer Price Index – and in particular the Structural Index – the most accurate way to measure inflation.

At the same time, data released by the Ministry of Commerce showed that consumer spending increased by 0.2% last month. The January data was revised upwards by 2.7% instead of the 2.1% initially announced. The average estimates of analysts in a Reuters poll spoke of an increase in spending by 0.5%.

The new unemployment benefit applications in US programs increased last week at a rate that exceeded analysts’ estimates, however the bigger picture continues to show that the labor market is growing at a healthy pace.

In particular, the initial applications for unemployment benefits increased by 14,000 to 202,000 for the week ended March 26, according to the US Department of Labor. Analysts’ average estimates in a Bloomberg poll put the applications at 196,000.

Ongoing applications, meanwhile, fell further to 1.3 million for the week ended March 19.

On Friday, the US Department of Labor will announce data on new jobs and unemployment in March. Analysts expect the data to show that the US economy added another 500,000 jobs in March, leading to a further drop in unemployment to 3.7%.