NEW YORK (Dow Jones) — Wall Street ended the last trading day of the week in decline. After a volatile course, it went down more significantly in late trading. As a result, volatility remained high amid concerns of further sharp rate hikes to curb inflation and the increasing likelihood of a recession. The slight increase in bond yields also had a negative effect.
The Dow Jones index lost 1.7 percent to 28,726 points. The S&P 500 and the Nasdaq Composite each fell 1.5 percent. The 1,544 (Thursday: 558) price winners faced 1,668 (2,702) losers. 126 (136) titles closed unchanged.
Inflation concerns were fueled on Friday. Because the inflationary pressure in the US increased again in August. The core PCE deflator rose 4.9 percent year-on-year, after rising 4.6 percent the previous month. The deflator is the Federal Reserve’s preferred indicator of inflation.
Deputy Federal Reserve Chair Lael Brainard has also warned that there could be new disruptions on the supply side of the economy, leading to higher inflation and triggering new monetary policy reactions.
In addition, the mood among purchasing managers in the greater Chicago area cooled off significantly in September. The Chicago Business Barometer slipped below the expansion line of 50. Attention will now turn to September’s national ISM data on Monday. In contrast, the University of Michigan consumer sentiment index improved in September. Personal income and spending data for August were in line with expectations.
“In balancing growth versus inflation, the Fed will choose inflation,” said Desmond Lawrence, senior investment strategist at State Street Global Advisors. “That’s the reason for the unrest that we’ve had, especially in the past week.”
Dollar little changed – yields rise slightly
On the foreign exchange market, the dollar gave up interim gains and was hardly changed. Analyst Chris Turner from ING sees the reasons for the dollar strength as intact. The prospect of further interest rate hikes in the US and the demand for safe havens due to economic and geopolitical risks should ensure that any losses are only temporary.
Yields increased slightly on the bond market. The further increase in inflationary pressure in the USA should confirm the US central bank in its interest rate hike course, it said. The main obstacle for the Fed is the tight labor market. Analysts expect job creation to have slowed in September. The official US jobs report will be released next Friday. The 10-year yield rose 1.2 basis points to 3.80 percent.
Oil prices lost up to 1.8 percent. Concerns about falling demand continued to weigh on here, with the aggressive tightening of the monetary policy central banks increase the risk of a recession, it said. “The outlook for crude oil demand is not exactly supported by economic data and company reports,” said Edward Moya of Oanda. He expects prices to stabilize towards the end of the year.
With the dollar little changed, the price of gold recovered. Above all, however, further sharply rising interest rates to curb inflation should weigh on the interest-free precious metal, it said.
Nike with price slide
Nike shares fell 12.8 percent. The US sporting goods manufacturer has given a gloomy outlook after a profit slump in the first fiscal quarter in view of high inventories in the run-up to the important Christmas trade. According to the management, the destocking will be accompanied by stronger discount campaigns. In the current environment of high inflation rates, uncertain consumer demand and falling sales in China, this will put additional pressure on margins.
Micron Technology shares gained 0.2 percent. The memory chip maker has delivered slumps in sales and profits and a bleak outlook. However, non-GAAP earnings for the fiscal fourth quarter beat market consensus.
The EU antitrust authority has launched a formal investigation into the planned takeover of Activision Blizzard (-0.7%) by Microsoft (-1.9%). The agency joins other key regulators scrutinizing the $75 billion deal.
Facebook parent company Meta (-0.5%) has imposed a hiring freeze to cut corporate costs. In addition, the company wanted to take further measures, as reported by people familiar with the matter.
===
INDEX last +/-% absolute +/-% YTD
DJIA 28,725.51 -1.7% -500.10 -21.0%
S&P 500 3,585.62 -1.5% -54.85 -24.8%
Nasdaq Comp. 10,575.62 -1.5% -161.89 -32.4%
Nasdaq-100 10,971.22 -1.7% -193.56 -32.8%
US Bonds
Term Yield Bp to VT Yield VT +/-Bp YTD
2 years 4.22 +0.8 4.21 349.1
5 years 4.06 +3.5 4.02 279.7
7 years 3.95 +2.2 3.93 250.9
10 years 3.80 +1.2 3.79 228.7
30 years 3.76 +4.1 3.72 186.4
FOREX last +/- % Fri, 8:19 Thu, 17:32 % YTD
EUR/USD 0.9800 -0.2% 0.9816 0.9782 -13.8%
EUR/JPY 141.83 -0.0% 141.83 141.23 +8.4%
EUR/CHF 0.9667 +0.9% 0.9582 1.0207 -6.8%
EUR/GBP 0.8778 -0.6% 0.8827 0.8866 +4.5%
USD/JPY 144.75 +0.2% 144.51 144.46 +25.8%
GBP/USD 1.1165 +0.4% 1.1120 1.1032 -17.5%
USD/CNH (Offshore) 7.1393 +0.6% 7.0886 7.1159 +12.4%
Bitcoin
BTC/USD 19,476.51 +0.2% 19,448.00 19,269.00 -57.9%
CRUDE OIL last VT settlem. +/- % +/- USD % YTD
WTI/Nymex 79.76 81.23 -1.8% -1.47 +13.3%
Brent/ICE 87.90 88.49 -0.7% -0.59 +18.9%
GAS VT Settlem. +/- EUR
Dutch TTF 186.25 203.75 -8.6% -17.50 +215.6%
METALS last day before +/- % +/- USD % YTD
Gold (Spot) 1,661.45 1,660.80 +0.0% +0.65 -9.2%
Silver (Spot) 19.02 18.83 +1.0% +0.20 -18.4%
Platinum (Spot) 864.55 868.50 -0.5% -3.95 -10.9%
Copper Future 3.48 3.44 +1.2% +0.04 -21.4%
YTD relative to previous day’s close
===
Contact the author: [email protected]
DJG/DJN/ros
(END) Dow Jones Newswires
September 30, 2022 16:18 ET (20:18 GMT)
Leverage must be between 2 and 20
No data