(New York) The New York Stock Exchange concluded Monday a very strong month of October, the best since 1976, ending the session down in expectation of the Fed.
Updated yesterday at 5:30 p.m.
According to final results, the Dow Jones fell 0.39% to 32,732.95 points, the tech-heavy NASDAQ fell 1.03% to 10,988.15 points and the S&P 500 fell 0.75. % at 3871.98 points.
“The market was a bit low today due to, I think, some profit taking ahead of the Central Bank (Fed) monetary meeting which starts on Tuesday,” Peter Cardillo of Spartan Capital told AFP.
The analyst pointed out, however, that Wall Street had posted “its best month in 46 years”, after suffering a severe fall in September.
In October, the Dow Jones index will therefore have climbed by some 14% after two consecutive months of losses. The NASDAQ gained about 4% and the S&P 500 8%. This is the best month for the Dow Jones since January 1976.
“I suspect that before the two major events of the week, the market will remain in a narrow trading range”, predicted Peter Cardillo, citing on the one hand the monetary meeting of the Fed on Tuesday and Wednesday, on the other the publication of the official employment report on Friday.
On Wednesday, investors will focus on Fed chief Jerome Powell’s press conference to see if he distills any clues about the central bank’s future intentions.
Many believe the Fed could ease off early next year in its monetary policy tightening.
In the meantime, a new and fourth increase of 75 percentage points in key rates is highly anticipated by the markets.
This outlook has further pushed up bond rates, those at ten years amounting to 4.05% against 4.01% on Friday. Two-year rates, even more sensitive to the Fed’s overnight rates, crossed 4.48% from 4.41% at the end of the week.
But the employment figures could have an even greater influence on the mood of investors on Friday as we watch for the effects of monetary tightening on the labor market.
Analysts expect a slight slowdown in job creation to 220,000, against 263,000 in September, with an unemployment rate of 3.6%, up slightly.
Corporate results remained in the background as the majority of Dow Jones companies announced theirs. We are still waiting in particular for Uber and Pfizer on Tuesday.
China’s strict zero-tolerance policy towards COVID-19 continued to dampen investor sentiment. A Disneyland park in Shanghai has shut down abruptly, confining visitors inside until they test negative for COVID-19.
Tech stocks suffered the most, with Meta (Facebook, 6.09%) still impacted by shrinking earnings and flat user numbers. Shares of semiconductor manufacturers were also struggling, such as Intel (-2.20%) and AMD (-3.14%).
iPhone maker Apple fell 1.54% amid press reports of a possible 30% cut in production of the brand’s phones at one of the group’s largest Chinese factories due to strict anti-corruption measures. COVID-19.
Dozens of employees of this factory located in the city of Zhengzhou (center), which employs 200,000 people, fled to escape confinement after the detection of a few cases of the disease.
The title of Twitter has definitively disappeared from the rating after the takeover of the social network by Elon Musk. The New York Stock Exchange said on Friday it planned to delist after all shares were redeemed at $54.20 per share, slightly better than the last price ($53.70).
The boss of Tesla dissolved the board of directors of Twitter on Monday and became the sole leader of the social network.
In Toronto
Both Canadian and US markets closed lower on Monday, with the Toronto Stock Exchange somewhat supported by energy stocks even as the price of oil fell.
The Toronto floor’s S&P/TSX Composite Index lost 45.05 points to 19,426.14 points.
After a volatile month, markets were more stable on the last day of October, said Lesley Marks, chief investment officer, equities, at Mackenzie Investments.
“People want to make sure that we maintain the great gains we made this month,” she said.
Investors are cautious ahead of an expected three-quarters percentage point rate hike by the Federal Reserve this week, Ms.me Marks, while the Bank of England is also expected to hike rates this week.
The energy index rose 1.62%, while battery metals fell 1.59%, information technology 1.23% and base metals nearly 1%. .
Other indexes fell or rose only slightly, while health care rose more than 4%, driven by another strong day for Canopy Growth.
In the currency market, the Canadian dollar traded at 73.27 cents US, down from its average price of 73.45 cents US on Friday.
The price of oil, meanwhile, is falling due to gains in oil production in the United States, according to Mme marks. “Obviously, more supply is negative for oil prices. »
However, the price of natural gas is on the rise, Ms.me Marks, which likely drove the energy sector higher on Monday.
Canadian and U.S. labor force data will help determine whether the economy is slowing at the pace central banks predict, Ms.me marks.
“Bad news will be good news,” she said.
“We still have what appears to be a shortage of workers in Canada and the United States…so what we need to see is that a little more underemployment is created in our economies to reduce some of the this wage pressure and offset the upward pressure that contributes to more rigid inflation. »
Canada is just entering earnings season, but Mme Marks stressed that she would be looking for guidance on the companies’ outlook for 2023 more than their third-quarter data.
With rate hikes advancing rapidly this year, historical data like earnings don’t tell the whole story, she said.
“We really need to focus more on leading indicators,” she said, such as labor data, which indicates the balance between labor supply and demand and wage pressures. on the rise.
The Canadian Press