Recession risk | Wall Street essentially ends in the red

(New York) The New York Stock Exchange indexes ended mostly in the red on Wednesday, in the face of recession fears and weak indicators.



While the Dow Jones index remained positive, climbing 0.24% to 33,482.72 points, the tech-heavy NASDAQ dropped 1.07% to 11,996.86 points and the broader S&P 500 index gave way. 0.25% to 4090.38 points.

“The market ended on a mixed note, investors focused on recession and bond yields are falling,” commented Peter Cardillo of Spartan Capital Securities.

On the bond market, the rates on Treasury bills eased, materializing these fears of recession. Those at ten years fell to 3.29% against 3.33% the day before and those at two years fell back to 3.77% against 3.82% around 4 p.m. (Eastern time).

“News from the macro-economy side has weakened, notably job creations in the private sector” from the ADP survey, continued the analyst.

Hiring in the private sector came out for March at 145,000 against 205,000 expected and after 261,000 in February. This figure does not bode well for the official report on employment which is expected on Friday and attests to the cooling of the labor market.

For Peter Cardillo, “much of the possibility of a recession is already factored into stock prices, but it is becoming more likely”.

“That the S&P 500”, the most representative index of the American market, “returns to the level of 3700-3750 points, it is possible, but that it falls back to its lowest level of last year, I do not do not believe it, ”he tempered.

In addition to the ADP survey, the ISM barometer of activity in services in the United States was also disappointing.

The index slowed to 51.2% in March from 55.1% the month before and 54.3% forecast by analysts.

Activity in services, the leading sector of the American economy, thus remains, by little, expanding while that of the manufacturing sector, published on Monday, is already in recession at 46.3%.

Finally, the last indicator of the day, the US trade deficit widened for the wrong reasons, with both a decrease in exports, but also a decline in imports.

“The bottom line is that this decline in both exports and imports reflects a slowdown in global trade,” said Patrick O’Hare of Briefing.com.

In terms of values, Johnson and Johnson benefited (+4.52%) from its decision to settle once and for all the lawsuits it has been facing for years concerning its talc.

The pharmaceutical giant has offered compensation of almost 9 billion dollars over several years, without acknowledging its guilt while its talc is accused of having caused ovarian cancer.

Express carrier FedEx was sought after (+1.50%) after announcing a restructuring of its delivery methods and an increase in its dividend.

Walmart, the number one discount retailer (+1.66%), reassured investors at a conference of analysts, confirming its sales and growth targets.

On the downside, big tech names that led the market up at the end of the first quarter were subject to profit taking like Nvidia (-2.08%) and AMD (-3.45%). %) in semiconductors, but also Amazon (-2.74%), Apple (-1.13%) or Microsoft (-0.99%).

Alphabet (Google) fared better (-0.16%), especially after claiming that its microprocessor dedicated to artificial intelligence was more efficient than its competitor designed by Nvidia.

The regional bank Western Alliance, which plunged 19%, recovered a little (-12.38% at the close) after giving details on Wednesday, in a document filed with the SEC, on its balance sheet and the status of its deposits.

Toronto Stock Exchange down more than 100 points

The Toronto Stock Exchange closed Wednesday down more than 100 points, victim of losses in the base metals, energy and information technology sectors, while the major American indices ended the day in good shape. scattered.

The Toronto floor’s S&P/TSX Composite Index lost 116.21 points to 20,159.55 points.

“It’s not in recession mode yet, but it’s a bad surprise,” observed Greg Taylor, chief investment officer at Purpose Investments.

“I think with this people are starting to worry that the economy is falling into recession and the downturn could hit sooner rather than later. »

Tech stocks saw some of the biggest declines, including Shopify down nearly 5%, while some commodities stocks saw gains with the recent rise in gold prices.

Shares in the telecommunications sector were up after the takeover of Shaw Communications by Rogers Communications earlier in the week.

Taylor said many investors are waiting for more data to come, including U.S. bank earnings data next week, as well as the Bank of Canada’s next interest rate decision.

In the currency market, the Canadian dollar traded at an average rate of 74.31 cents US, down from 74.37 cents US on Tuesday.

On the New York Commodities Exchange, crude oil fell 10 cents US to US$80.61 a barrel, while natural gas rose 5 cents US to US$2.16 per million. BTUs.

The price of gold returned US$2.60 to US$2035.60 per ounce and that of copper rose about 2 US cents to US$3.99 per pound.

The Canadian Press


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