Wall: Turmoil … continued in 2022, with losses in the week the indices

The Wall Street stock index closed lower on a weekly basis on Friday, confirming that 2022 has started with turmoil, mainly due to inflationary pressures and the prospect of tightening monetary policy by the Federal Reserve.

On the board for Friday’s meeting, the industrial Dow Jones fell by 201.81 points or 0.56%, to 35,911.81 points, with the widest S&P 500 to gain 3.08 points or 0.07%, at 4,662.10 and the technological Nasdaq to record an increase of 86.9 points or 0.59%, to 14,893.80 points.

In weekly basis, the Dow lost 0.88%, the S&P 500 0.30%, while the Nasdaq 0.28%. This is the second consecutive week of losses on Wall Street.

Banking stocks, which have been showing strong uptrends lately, in a climate of rising interest rates, moved with mixed signs and generally declining, despite the strong results they recorded.

JPMorgan Chase, the first US bank in terms of assets, exceeded analysts’ estimates in terms of both revenue and profits, but its share fell by about 6%. Its CFO, Jeremy Barnum, warned that the company was unlikely to meet a significant profit target it had set for the next two years.

Citigroup shares lost 1.3%, with the bank gaining strong revenue but falling 26% in terms of profits.

On the other hand, the share of Wells Fargo “added” 3.7%, after the better-than-expected course of its earnings. Its CEO, Charles Scharf, noted that the demand for loans revived significantly in the second half of 2021.

“What really stands out in the banks’ results is the expansion of spending, for both Wells Fargo and JP Morgan,” said Gerard Cassidy, a high-capital banking analyst at RBC Capital Markets. “Wells Fargo had already announced plans for future spending cuts, which probably explains the good course of its stock today,” he added.

The macroeconomic mantas did not help the climate much, as both retail and industrial production in the US fell in December, contrary to analysts’ more optimistic estimates.

Casino shares also rose sharply, with Las Vegas Sands jumping 14% and Wynn Resorts gaining 8.6%.

The leap came after the decision of the government of semi-autonomous Chinese Macao to allow a total of only six casino licenses in the city. The companies whose shares are soaring are already operating in Macau, which is a “paradise” for gambling.

It makes “sense” for the US Federal Reserve to start raising interest rates in 2022, as it “mitigates” the support it provided during the pandemic, the Fed chairman of New York said on Friday. John Williams.

The Fed will focus on economic data when it decides the exact time and rate of interest rate hikes, Williams said, adding that it was “reasonable” for the central bank to continue withdrawing facilities.

The Fed official said that the central bank should reduce its bonds after raising interest rates and said that monetary policy makers have the necessary tools to properly manage the balance sheet.

Netflix shares gained more than 1%, after the company announced that it is increasing the subscription for its subscribers in the USA and Canada.

2022 has started with turmoil for investors, with technology stocks under strong pressure, especially in the first week of the year, as the Fed has signaled a more aggressive approach to inflation, which will be shaped by interest rate hikes.

Of the 30 Dow shares, 15 traded positive and 15 traded negative. The profits were led by those of Amgen, Microsoft, Chevron, while those losses of JP Morgan, Home Depot and American Express.

Macro

Dived by retail sales in the US in December, as consumers found themselves facing the latest wave of the coronavirus pandemic and while market shortages continued due to disruptions in global supply chains.

In particular, retail sales fell 1.9% in December after a small increase of 0.2% in November, according to the US Department of Commerce. Analysts expected retail sales to remain unchanged, according to a Reuters poll.

Analysts estimate that the decline in sales is likely to continue in January as the rapid increase in cases due to the micron restricts the movement of consumers to places such as restaurants and bars.

Excluding cars, gasoline sales, building materials and catering services, sales fell 3.1%, according to government figures.

THE production in American factories, moreover, declined unexpectedly in December, with a weight reduction in production in car factories in the midst of the continuing global shortage of semiconductors, as writes the Reuters agency.

In particular, production fell 0.3% in December after rising 0.6% in November, the US Federal Reserve (FED) announced on Friday. Economists polled by Reuters forecast a 0.5% increase in factory output. On a yearly basis, production increased by 3.5% in December.

Manufacturing, which accounts for 11.9% of the US economy, is still supported by low business inventories, as demand for goods remains strong. But the coronavirus and the pandemic recovery have disrupted supply chains, boosting inflation.

Production increased at an annual rate of 4.9% in the fourth quarter, after an increase of 4% in the third quarter.

Production at car factories fell 1.3% in December after rising 1.7% in November. Vehicle production is about 6% lower than the 2021 level.

Last month’s decline in manufacturing output combined with a 1.5% drop in utilities pushed industrial production down 0.1%, after rising 0.7% in November.

Industrial production increased at a rate of 4% in the fourth quarter, after an increase of 3.5% in the third quarter.