Weak reaction on the Wall at the close of a week of mass sales

The key indicators of the American market are moving with controlled gains, which does not seem capable of changing much after completing a week of strong sell-off.

In particular, the Dow Jones industrial average is moving at 30,180 units with a small rise 0.5% or 150 units, while it remains at a distance of just over 1% from its typical entry into a bear market (approximately 25,560 units).

The broader S&P 500 is moving at 3,700 units on the rise 0.9%while the technologically weighted Nasdaq is boosted by 1.5% at 10,810 units.

The indices come from another strong sell-off yesterday, which erased Wednesday’s gains with the above, in the positive initial reception of the brutal interest rate increase of 0.75% by the Fed, and are heading for the end of a strongly negative week.

Specifically, the S&P has entered today’s session with -6% per week, the Nasdaq with -6.1% and the Dow Jones with -4.7%, with the industrial index completing its 11-week decline in the last 12.

“The week has been tumultuous … Let me tell you – we’re in a recession,” Wharton’s professor Jeremy Spiegel said after yesterday ‘s closing session on CNBC. “It is a mild recession. It is not officially a recession, certainly not yet, but this first half of the year had a negative GDP growth and it ends up slipping.”

The volatility of the US market may be more pronounced today, due to “quadruple witching”, ie the parallel expiration of derivative indices, stocks and their corresponding options, a condition that occurs once a quarter and is usually accompanied by a jump trading volume as traders close their positions.

Meanwhile, the chairman of the Federal Reserve, Jerome Powell, today reiterated the bank’s determination to face the highest inflation in the last 40 years, which, according to him, encourages the whole world to trade with the US dollar.

“My colleagues and I are solely focused on getting inflation back to the official 2% target,” he said, adding that the Federal Reserve’s strong commitment to our price stability mission contributes to the broader confidence the dollar enjoys as a medium. value storage “.

In any case, the signs of the course of the American economy continue to send negative messages.

Among other things, the spread of US corporate bonds with a junk rating, a significant risk indicator that indicates the risk of rising bankruptcy, exceeded 500 basis points for the first time since November 2020.

Characteristically, for most of the pandemic era, companies with a junk rating around the world needed to pay slightly more than those with a top rating, averaging just 2.4% more in 2021 (240 basis points).

At the same time, after three months of growth, manufacturing activity in the US fell by 0.1% in May, when the average estimates of analysts in a Bloomberg poll spoke of a 0.3% increase in factory production.

It was recalled that yesterday it was announced that new home openings fell by 14% in May, compared to an estimate for a decline of only 2.6%, while the Fed Philadelphia manufacturing index for June was recorded at -3.3 from 2, 6, showing the first contraction (each measurement below 0) from May 2020.

On the board

In the movements of individual shares, after the pounding received yesterday, the technological titles show some signs of reaction, but not to the extent that they erase the recent losses.

Indicatively, the titles of Apple, Microsoft, Amazon, Meta and Alphabet are all positive, but with gains in the range of 1 to 2%.

At the same time, Tesla after -8% is strengthening today by 3.3% and Netflix is ​​at 2.5% after yesterday -3.8%.

Salesforce and American Express are at the top of the Dow Jones, but with gains of 3% after the pounding of more than 5% for both yesterday, while Chevron continues to decline today at -1%.