NEW YORK (Dow Jones) — After yesterday’s rebound, US stocks are likely to start trading higher again on Friday. The futures on the S&P 500 are up 0.7 percent pre-market. The trading week, however, is characterized by a very volatile environment on Wall Street.
Declining market interest rates had recently had a supportive effect, as investors sought refuge in supposedly safe government bonds. The background is the fear of the economy slipping into recession in view of high inflation and the rapid turnaround in interest rates by the US Federal Reserve to combat inflation. Weaker economic data has also fueled expectations that the Fed could ease its aggressive interest rate stance, they say.
US Federal Reserve Chairman Jerome Powell repeated in a hearing before the Financial Services Committee on Thursday that the focus was on fighting inflation and that a rapid increase in key interest rates was associated with the risk of a recession.
Meanwhile, the Fed gave the big US banks good marks in their annual stress test. These are able to continue lending to households and companies even in a severe recession. On the economic side, May home sales data and the University of Michigan Consumer Sentiment Index for June will be released at second reading.
Oil prices are rising a little – so are yields
Oil prices are going up a bit. The price of a barrel of the WTI variety rose by 2.2 percent, the Brent price was 2.0 percent higher. Worries about an economic downturn had recently pulled prices down somewhat.
The dollar is little changed on the foreign exchange market. The dollar index fell 0.1 percent. Unicredit expects the greenback to remain firm for the remainder of 2022 as the US Federal Reserve continues to hike interest rates aggressively. However, next year the US currency is likely to fall slightly, according to the analysts.
Yields on the bond market are rising slightly, having recently fallen sharply due to fears of a recession. The 10-year yield is 1.9 basis points higher at 3.11 percent.
Zendesk jumps almost 50%
The share of the software provider Zendesk makes a jump in price by 47.6 percent. According to people familiar with the events, the company is facing a multi-billion dollar takeover by a group of financial investors led by Hellman & Friedman and Permira.
According to informants, the US pharmaceutical group Merck & Co (+0.3%) is pushing ahead with a possible takeover of the US biotech company Seagen Inc (+3.5%). If the deal goes through, it would be one of the biggest acquisitions of the year. In addition, the European Commission has granted extended approval for the blockbuster cancer drug Keytruda.
The US logistics group Fedex (+2.6%) turned over and earned more in the fourth business quarter, despite a decline in parcel shipments and higher salary payments. Above all, higher freight rates and fuel surcharges were responsible for the increase in profit.
Netflix advance 0.8 percent. The streaming service is laying off 300 employees worldwide, around 3 percent of the workforce, to reduce costs in the face of declining subscribers. The move follows an earlier round of layoffs in May that affected 150 employees.
Gunmaker Smith & Wesson (-0.6%) reported a 44 percent decline in sales in the fourth fiscal quarter on a backdrop of further softening demand. Profit, while down, was higher than analysts had expected on an adjusted basis, as was revenue.
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US Bonds
Term Yield Bp to VT Yield VT +/-Bp YTD
2 years 3.07 +4.4 3.03 234.2
5 years 3.17 +2.4 3.15 191.4
7 years 3.18 +2.1 3.16 173.8
10 years 3.11 +1.9 3.09 159.7
30 years 3.23 +2.8 3.20 133.3
FOREX last +/- % Fri 7:40am Thu 5:19pm % YTD
EUR/USD 1.0533 +0.1% 1.0546 1.0521 -7.4%
EUR/JPY 142.24 +0.2% 142.08 141.66 +8.7%
EUR/CHF 1.0068 -0.5% 1.0129 1.0090 -3.0%
EUR/GBP 0.8580 -0.0% 0.8586 0.8582 +2.1%
USD/JPY 135.06 +0.1% 134.74 134.62 +17.3%
GBP/USD 1.2276 +0.1% 1.2284 1.2260 -9.3%
USD/CNH (Offshore) 6.6899 -0.1% 6.6900 6.6995 +5.3%
Bitcoin
BTC/USD 21,360.19 +3.3% 21,103.27 20,486.52 -53.8%
ROHL last VT-Settl. +/- % +/- USD % YTD
WTI/Nymex 106.57 104.27 +2.2% 2.30 +47.7%
Brent/ICE 112.22 110.05 +2.0% 2.17 +48.8%
METALS last day before +/- % +/- USD % YTD
Gold (Spot) 1,824.03 1,822.80 +0.1% +1.23 -0.3%
Silver (Spot) 20.89 20.96 -0.3% -0.07 -10.4%
Platinum (Spot) 916.50 911.03 +0.6% +5.48 -5.6%
Copper Future 3.70 3.74 -1.1% -0.04 -16.7%
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DJG/DJN/err/flf
(END) Dow Jones Newswires
June 24, 2022 08:45 ET (12:45 GMT)
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