Wall Street loses momentum ahead of inflation data

LAST UPDATE: 21:59

Wall Street’s indexes, which have been in the green since the start of the session, are losing momentum again, as investors appear to be taking a wait-and-see attitude ahead of tomorrow’s inflation data but the start of of the second quarter corporate results period, which they hope will give them a clearer picture going forward..

On the board, all three indexes returned to negative territory, with the Dow Jones industrial average losing 27.51 points, or 0.09%, to 31,146.33, the broader S&P 500 losing 0.55% to 3,833.22 units and the tech Nasdaq to drop 0.60% to 11,304.75 units.

On Monday, the Dow Jones lost nearly 165 points, or 0.5%, the S&P 500 lost 1.2% and the tech index fell 2.3%, as tough new restrictions to tackle the pandemic in several Chinese cities raised fears of a global economic slowdown.

The change in course was caused by the small slide of the dollar, which earlier strengthened and reached absolute parity with the euro. It is noted that the US Dollar index, which compares the American currency to a basket of strong currencies, earlier climbed by 0.5% to 108.52, a 20-year high, but then retreated. Right now the index is down 0.10 to 107.92.

Investors remain cautious as they worry about the outlook for corporate earnings amid signs of slowing global growth and rising inflation, suggesting continued aggressive monetary tightening by banks.

“Sentiment has soured over the past 24 hours as investors await several data releases and earnings reports this week, which will set the stage for some important central bank meetings over the next couple of weeks,” explained Jim Reid, an analyst at Deutsche Bank. .

In the US, the second quarter results reporting period is officially opened by the big banks in the coming days, with JPMorgan Chase and Morgan Stanley MS announcing their figures on Thursday, and Citigroup and Wells Fargo following on Friday.

Analysts expect a limited improvement in corporate earnings, with average estimates calling for a 4.3% rise in S&P 500 corporate earnings, the weakest since late 2020, according to FactSet data.

It’s worth noting that just three months ago, analysts were forecasting a 5.9% rise, with the decline reflecting concerns that runaway inflation and the resulting higher borrowing costs imposed by central banks as they try to deal with rising interest rates prices, business sizes have also been affected.

In individual stocks, PepsiCo gained 0.5% as the soft drinks and snacks giant reported second-quarter earnings and revenue that beat expectations, while reaffirming its full-year guidance.