NEW YORK (awp international) – US standard values were able to contain their high initial losses on Thursday and only ended trading with a slight minus. Technology stocks even managed a modestly positive daily close. However, the fear of even more sharply rising interest rates with negative effects on economic development and the attractiveness of stocks remains.
The surprisingly high rate of inflation in the world’s largest economy, which was published mid-week, is currently fueling fears of even more aggressive interest rate hikes by the US Federal Reserve. The picture has now been underpinned by unexpectedly high producer prices, which are likely to increase the pressure on the Fed. Investors fear that aggressive central bank policy will push the economy into recession.
At the close of trading, the Dow Jones Industrial fell by 0.46 percent to 30,630.17 points. At the beginning he had fallen to 30 143.93 points. The market-wide S&P 500 finally lost 0.30 percent to 3790.38 points. The technology-heavy Nasdaq 100 even went up 0.34 percent to 11,768.40 points.
“The frightening part of yesterday’s inflation report is that, according to many economists, the more than nine percent inflation could not yet represent the high point,” wrote market analyst Jochen Stanzl from the trading house CMC Markets.
Other economic data of the day were also sobering: initial applications for unemployment benefits rose surprisingly last week, even if the situation on the labor market remains fundamentally positive.
Against this background, Bank of America lowered its year-end target for the S&P 500 from 4500 to 3600 points. According to their own statements, the analysts are therefore the most pessimistic of all experts. In the bank’s opinion, the US is likely to slide into a mild recession in the second half of the year. Lutz Wockel, head of equity fund management at Warburg Invest AG, added that the start of the companies’ Q2 reporting season poses additional risks for investors.
As usual, this started with the big banks. JPMorgan and Morgan Stanley made the start. In view of the clouded economic prospects, the largest US bank announced a further and surprisingly significant year-on-year decline in profits. Among other things, earnings from the investment banking (IB) business disappointed. The billion-dollar buyback of own shares is therefore now suspended for the time being. The shares fell as the second weakest Dow value by three and a half percent.
Morgan Stanley shares lost almost half a percent. JPMorgan’s competitor also disappointed with its IB business and reported falling profits in the second quarter.
An analyst’s judgment from Credit Suisse weighed heavily on the shares of the fertilizer manufacturer Nutrien. The papers buckled by almost five percent. Expert John Roberts expects agricultural segment economics and fertilizer profitability to be near peak. The expert believes that the valuation of Nutrien stocks will remain low until the cycle bottoms out.
The euro was last listed at 1.0013 US dollars. The European Central Bank had set the reference rate at 1.0067 (Tuesday: 1.0042) dollars. The dollar thus cost 0.9933 (0.9958) euros.
On the US bond market, the futures contract for ten-year Treasuries (T-Note Future) fell by 0.38 percent to 118.47 points. In contrast, the yield on ten-year government bonds rose to 2.96 percent
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