NEW YORK (Dow Jones) — Wall Street starts the new trading week with significant losses and thus continues the downward slide. The ongoing interest rate fears had already led to strong selling pressure in the previous week. Interest-sensitive technology stocks in particular were sold off by investors. The sector also tops the list of losers on Monday. In addition to interest rate concerns, the geopolitical tensions in Eastern Europe are also unsettling.
In the course of time, the courses expand their losses. The Dow Jones index was down 2.3 percent at 33,472 points around noon (New York local time). The S&P 500 is down 3.0 percent. The tech-heavy Nasdaq Composite is down 3.6 percent.
“Following last week’s sell-off and facing an extremely busy schedule this week, there is uncertainty,” said Pierre Veyret, technical analyst at Activtrades.
Investors are focusing on the US Federal Reserve’s mid-week meeting and its reaction to extremely high inflation. Fed President Jerome Powell’s statements are eagerly awaited. The majority is assuming that the central bank will confirm its key interest rates at 0 to 0.25 percent this time. A first interest rate hike and the beginning of the reduction of the central bank balance sheet are then expected for the March meeting. Five interest rate hikes in the current year are now being priced in on the financial markets.
On the economic side, economic activity in the USA weakened in December. The Chicago Fed National Activity Index (CFNAI) fell to -0.15 points. The Markit purchasing manager indices for the service sector and manufacturing for January also fell significantly compared to the previous month.
Kohl’s are peddling takeover bids
Bucking the negative market trend, Kohl’s jumped 34 percent. The retail group has confirmed that it has received takeover offers, but did not name any names. The Wall Street Journal previously reported, citing people familiar with the matter, that a consortium backed by activist hedge fund Starboard Value LP has bid around $9 billion to buy Kohl’s. Meanwhile, Bloomberg, citing sources, reported that Sycamore Partners had approached Kohl’s.
Peloton are holding up better than the market at minus 0.2 percent. An activist investor is demanding that the company fire its CEO and explore a sale of the company after shares in the fitness bike maker fell more than 80 percent from their highs. According to people familiar with the matter, Blackwells Capital owns less than 5 percent of Peloton and wants to call for CEO John Foley to be fired and the company sold. The investor believes Peloton could be an attractive acquisition target for larger tech or fitness companies, the people said.
Boeing (-4.2%) is expanding its involvement in air taxis. As the group announced, it is investing a further 450 million US dollars in its joint venture Wisk, which it runs together with Google co-founder Larry Page.
Halliburton reported fourth-quarter sales and net income above market expectations and has returned to profitability. In addition, the quarterly dividend was increased significantly. The share is meanwhile down 2.3 percent, but since the beginning of the year it has gained around 20 percent in value, which speaks for profit-taking.
Bank JP Morgan Chase (-2.9%) has merged its EU operations in Germany to simplify its structure for clients in the European Union. The US bank announced that it has merged its Luxembourg and Irish businesses with the German one.
Dollars and bonds wanted with uncertainties
The dollar has risen significantly on the foreign exchange market. The dollar index is about 0.4 percent higher. Euro falls to 1.1310 dollars from 1.1330 in the morning. The greenback is being supported by expectations of an imminent rate hike by the Fed and geopolitical concerns about Russia and Ukraine. The analysts at Deutsche Bank are assuming a total of four increases this year. But there is the tail risk that the central bank could come up with an even more hawkish surprise in the coming months.
On the oil market, prices are falling in a volatile environment. Market participants are concerned about geopolitical tensions in the Middle East and Eastern Europe.
Bonds are also in demand with the ongoing uncertainties among investors. The yield on ten-year paper is correspondingly 3.9 basis points to 1.72 percent.
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INDEX last +/-% absolute +/-% YTD
DJIA 33,472.42 -2.3% -792.95 -7.9%
S&P 500 4,267.67 -3.0% -130.27 -10.5%
Nasdaq Comp. 13,270.67 -3.6% -498.25 -15.2%
Nasdaq-100 13,922.66 -3.6% -515.74 -14.7%
US Bonds
Term Yield Bp to VT Yield VT +/-Bp YTD
2 years 0.99 -2.4 1.01 25.7
5 years 1.52 -3.8 1.56 26.4
7 years 1.68 -4.2 1.72 23.6
10 years 1.72 -3.9 1.76 21.2
30 years 2.05 -3.0 2.08 14.9
FOREX last +/- % Mon,8:05 Fri, 17:42% YTD
EUR/USD 1.1313 -0.3% 1.1330 1.1346 -0.5%
EUR/JPY 128.76 -0.1% 128.79 129.01 -1.6%
EUR/CHF 1.0346 -0.0% 1.0348 1.0345 -0.3%
EUR/GBP 0.8411 +0.5% 0.8362 0.8368 +0.1%
USD/JPY 113.83 +0.1% 113.91 113.72 -1.1%
GBP/USD 1.3450 -0.8% 1.3541 1.3558 -0.6%
USD/CNH (Offshore) 6.3380 -0.0% 6.3351 6.3397 -0.3%
Bitcoin
BTC/USD 34,437.60 -3.1% 35,230.63 38,651.22 -25.5%
ROHOEL last VT-Settl. +/- % +/- USD % YTD
WTI/Nymex 82.16 85.14 -3.5% -2.98 +9.7%
Brent/ICE 85.34 87.89 -2.9% -2.55 +9.5%
METALS last day before +/- % +/- USD % YTD
Gold (Spot) 1,834.83 1,833.60 +0.1% +1.23 +0.3%
Silver (Spot) 23.72 24.31 -2.4% -0.59 +1.8%
Platinum (Spot) 1,018.70 1,036.95 -1.8% -18.25 +5.0%
Copper Future 4.42 4.52 -2.3% -0.11 -1.0%
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(END) Dow Jones Newswires
January 24, 2022 12:14 PM ET (17:14 GMT)
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