The New York Stock Exchange ended in decline on Monday, misguided by the outbreak of coronavirus cases in China, in an already anemic market at the start of a week shortened by a holiday in the United States.
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The Dow Jones lost 0.13%, the Nasdaq index fell 1.09% and the broader S&P 500 index fell 0.39%.
“It’s a shortened week in the United States with the markets closing Thursday for Thanksgiving,” recalled Angelo Kourkafas, of Edward Jones, which explains, according to him, the lack of animation on the New York square.
For analysts at Briefing.com, the sharper decline in the indices at the end of the session was due to the rise in bond rates and the strengthening of the dollar.
After contracting as low as 3.75%, the yield on 10-year US government bonds rose to 3.84% from 3.82% on Friday.
“The mood is more risk averse today,” summed up Angelo Kourkafas, mainly due to the resurgence of Covid-19 in China.
The Chinese National Health Commission (NHC) on Monday published a new peak in contamination since the end of April, with 24,730 new cases. The rate of contagion has more than doubled in a week.
Rising bond rates and risk aversion are generally an indigestible cocktail for the technology sector. Apple (-2.17%), Amazon (-1.78%), Alphabet (-2.01%) and Meta (-1.95%) all drank the cup.
An industry considered volatile, the cryptocurrency sector remained in a turbulent zone after the FTX platform filed for bankruptcy ten days ago. The exchange site Coinbase continued its slide (-8.90%), as did Silvergate Capital (-4.76%), often nicknamed “crypto bank” (-2.53%).
Tesla also fell sharply (-6.84% to 167.87 dollars), after a new recall of vehicles, linked to a malfunction of the rear lights of more than 300,000 Model Y and Model 3. The manufacturer’s boss, Elon Musk also continues to make headlines for his restructuring of Twitter, which he took over in late October.
Conversely, Disney had a good day (+ 6.30% to 97.58 dollars), after the landing of its general manager, Bob Chapek, replaced by Bob Iger, emblematic boss of the entertainment giant from 2005 to 2020 , and who had presided over the takeover of Pixar, Lucasfilm (“Star Wars”) or Marvel.
Bob Chapek pays for the disappointing results of the Burbank (California) company, weighed down in particular by the cost of developing Disney’s streaming platforms. However, these are considered to be the preferred vector of growth for the company.
The vitality of Disney has long allowed the Dow Jones to stay in the green on Monday, before running out of steam at the end of the session.
The helping hand of several so-called defensive values, that is to say less sensitive to changes in the economy, such as the Merck laboratory (+ 1.32%) or the group of hygiene and care products Procter & Gamble (+1.27%), was also not enough to keep the Dow Jones’ head above water.
After being floated on the stock market with a bang on Friday, thanks to its merger with an already listed vehicle, the LGBTQ dating site Grindr unscrewed on Monday and lost almost half of its market capitalization (-46%).
Since the boost following the publication of the CPI consumer price index, which suggested a deceleration in inflation ten days ago, the indices have been treading water.
“The next catalyst for the markets should be the CPI index (consumer prices) and the last meeting of the Monetary Policy Committee” of the American central bank (Fed), expected in mid-December, judged Angelo Kourkafas.
Until then, he says, “it wouldn’t be surprising to see stocks consolidate and stay within tight margins.”