(New York) The New York Stock Exchange opened lower on Tuesday, bothered by the lack of clear progress on the US debt ceiling file, and struggling to exceed important technical thresholds on the rise.
Around 9:55 am (Eastern time), the Dow Jones fell 0.18%, the NASDAQ index yielded 0.16% and the broader S&P 500 index gave up 0.22%.
“Despite comments last night from President (Joe) Biden and Speaker of the House of Representatives (Kevin) McCarthy, who called their discussions “productive”, the market remains concerned about the extreme positions of each camp,” commented Quincy Krosby of LPL Financial.
If Kevin McCarthy estimated, at the end of his interview with the Head of State, that the exchanges had been the “best since we have been discussing”, no significant progress seems to have taken place, less than ten days from the deadline. to avoid a US default.
“Operators seem tired of all this talk and the lack of action to raise the debt ceiling,” added Patrick O’Hare of Briefing.com in a note.
Even if Wall Street does not show excessive tension for the moment, some indicators have already turned orange.
The VIX index, which measures market volatility, rose 3.8% on Tuesday.
The nervousness can also be seen in the bond market, where the yield on 3-month US government bonds rose to its highest level in 22 years, at 5.29%.
Rates also tightened on long-term maturities. The yield on 10-year US government bonds was 3.73%, compared to 3.71% the day before closing.
“The psychodrama of the debt ceiling has been a recurring disturbance lately, but other elements must be added to it, such as the specter of further rate hikes” by the American central bank (Fed), explained Patrick O’ Hare.
Added to this is Wall Street’s inability to breach some important technical thresholds higher, after the S&P 500 and NASDAQ recently posted multi-month highs at the close.
“The 4200 point threshold is difficult for the S&P 500, but we are seeing an influx (on the equity market), in particular from alternative funds (hedge funds)”, underlines Quincy Krosby, for whom an agreement on debt could allow instead of New York to break down these resistances.
On the stock market, the DIY chain Lowe’s (+1.77%) benefited from better than expected results, even if the group lowered its annual forecasts, in order to take note of “lower-than-expected demand for spending non-essential,” said CEO Marvin Ellison.
The major retailers are considered a barometer of consumption in the United States, the heart of the American economy.
Elsewhere on the stock market, semiconductor manufacturer Broadcom (+0.98%) was supported by the announcement of a multi-billion dollar contract with Apple, to which it will supply elements for connectivity to the 5G network.
The SEO platform and evaluation of businesses and restaurants Yelp climbed (+9.55%). The Wall Street Journal reports that the activist investment fund TCS Capital Management, which controls 4% of the capital, will ask the management of the social network to study a possible sale to a technology group.
Already well oriented Monday, the regional bank PacWest was again sought (+ 19.55%). The course of the Californian establishment has more than tripled (+230%) since its low in early May, when it appeared as a possible victim of the banking crisis.
Other regional brands targeted recently by investors raised their heads, like Bank of Hawaii (+3.28%) or Zions (+4.56%).
2023-05-23 13:48:02
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