(New York) The New York Stock Exchange was moving in the red again on Wednesday, seeming to realize that the Fed’s interest rate cuts could come later than expected, especially after the latest strong retail sales.
Around 10:10 a.m. (Eastern time), the Dow Jones index lost 0.28%, the technology-dominated NASDAQ lost 1.34% and the broader S&P 500 index fell 0.74%. Ten-year bond rates were trending at their highest level in a month.
Tuesday, after a long weekend, the indices ended slightly lower while bond rates rose after cautious remarks from a representative of the American central bank on monetary policy.
The Dow Jones lost 0.62% to 37,361.12 points, the NASDAQ lost 0.19% to 14,944.35 points and the S&P 500 fell 0.37% to 4765.98 points.
Art Hogan, analyst for B. Riley Wealth Management, pointed out on Wednesday that the consensus in favor of a rate cut by the Federal Reserve (Fed) starting in March fell to less than 60% at the opening “compared to 80 % at the end of last week, according to the CME FedWatch tool.
This decline in bets on a rate cut promised to accelerate during the session after the publication of new consumption data, more dynamic than expected.
Retail sales in December in the United States increased by 0.6% instead of the +0.4% expected in December.
“End-of-year purchases exceeded the most optimistic forecasts,” commented Robert Frick, economist for Navy Federal Credit Union.
But this surge in consumption should still experience “a slowdown in the future”, estimates Andrew Hunter of Capital Economics because “the lower job creations and the delayed impact of rate increases will weigh more”.
Bond rates, which have resumed an upward path since Friday, were still tightening. The ten-year yield on Treasury bills climbed to 4.11% compared to 4.05% the day before.
The two-year rate jumped to 4.34% against 4.21% on Tuesday.
After Christopher Waller, Governor of the Fed, who was in no hurry to lower rates on Tuesday, investors will listen to what John Williams, of the New York Fed, will have to say during a speech, second part of the session.
On the stock market, Boeing regained 2.13% after having plunged by almost 8% the day before.
The FAA, the air regulation agency, has just indicated that it has inspected around forty Boeing 737 MAX 9s, which remain grounded for the moment, after the incident of the door detached in mid-flight on Alaska Airlines.
Tesla fell 2.44%, after the electric manufacturer lowered the price of some of its models in several European countries including France, Germany, the Netherlands, Norway and China.
Spirit Airlines collapsed (-23%) for the second session in a row after a court decision which, in the name of respect for competition, refused the takeover project by the low-cost airline JetBlue (-6, 26%).
The brokerage giant Schwab saw its shares fall by 4.20% after quarterly results in decline, as did its turnover and the volume of its deposits.
The American company Albermale, producers of essential elements and minerals for various industries, lost 2.10%.
The world’s leading lithium producer has announced investment reductions and restructuring with staff cuts, after a drop in lithium prices.
TuSimple (-51% to $0.34), a young Californian autonomous driving company for trucks, announced in a press release on Wednesday that it was withdrawing from the NASDAQ listing.
“Since TuSimple went public in 2021, there has been a significant shift in the capital markets, driven in part by rising interest rates and quantitative tightening, which has changed investor sentiment at the moment. “with regard to developing technological companies”, regrets the company which “believes it can evolve better as a private company”. The last listing of the stock is scheduled for February 7.
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