New York stocks fell this week awaiting corporate earnings and comments from Federal Reserve Chairman Jerome Powell.
At the New York Stock Exchange (NYSE) on the 6th (US Eastern time), the Dow Jones 30 Industrial Average closed at 33,891.02, down 34.99 points (0.10%) from the battlefield.
The Standard & Poor’s (S&P) 500 index closed at 4,111.08, down 25.40 points (0.61%) from the battlefield, and the Nasdaq closed at 11,887.45, down 119.50 points (1.00%).
Investors seem to be taking profits while keeping an eye on companies’ performance and Chairman Powell’s Washington D.C. Economic Club debate scheduled for the next day.
Chairman Powell is highly likely to repeat his remarks at the press conference last week, but attention is paid to whether he will make remarks that significantly lower expectations of a rate cut within the year given that employment has increased significantly since then.
Friday’s employment report has investors worrying that the high interest rate environment created by the Fed could last longer than expected.
According to the Chicago Mercantile Exchange (CME) FedWatch, traders expect the Fed to raise rates by another 0.25 percentage points in May after raising rates by 0.25 percentage points in March.
A week ago, the possibility of a rate freeze in May was more than half.
The employment trend index also improved due to the favorable employment trend in January.
The Conference Board’s employment trend index (ETI) for January this year was 118.74, up from the previous revision of 117.06.
This is the second consecutive month of rise, and the index is a leading index for the employment market, meaning that an increase in the index is likely to increase employment.
Concerns about corrections continue as the stock market rises rapidly in the short term.
Goldman Sachs raised its three-month forecast for the S&P 500 from 3,600 to 4,000, but maintained its year-end forecast at 4,000.
Goldman Sachs pointed out that a soft landing, that is, growth that actually exceeds the trend, has already been reflected in the stock index, and the 12-month forward P/E ratio is 18.4 times, which is high compared to historical levels.
BITG Research chief technical analyst Jonathan Krinsky also saw 4,200 as strong resistance, saying the S&P 500 is up 20% from its October low.
He predicted that the index would not go down from this level for long.
The company’s results so far have generally exceeded expectations.
According to Refinitiv data, about half of the companies listed on the S&P 500 so far have announced their earnings.
Walt Disney, Chipotle, DuPont and PepsiCo are expected to report earnings this week.
Prior to the opening, shares of Tyson Foods, a meat processing company, fell nearly 5% on the news that earnings were weaker than expected.
Shares of apparel maker Children’s Place fell more than 4% as the company warned of a sharp drop in earnings and a loss.
PayPal’s share price fell more than 3% on the news that Raymond James downgraded his investment rating from ‘Above market rate’ to ‘Mark rate rate’.
Dell shares fell about 3% amid news that it was cutting about 5% of its workforce.
Tesla shares rose more than 2% amid news that Wedbush raised its price target from $200 to $225, saying Chinese demand would act as a tailwind.
Meme stock also surged again.
Bed Bath & Beyond’s stock soared 92% despite fears of an imminent bankruptcy filing.
During the intraday, the stock price rose by 120% at one time, and stock trading was suspended twice.
AMC Entertainment’s stock price also rose by more than 11% on the rebound of Meme stock.
GameStop’s share price also rose by more than 7%.
Of the 11 sectors in the S&P 500 index, all but utilities and consumer staples declined.
Telecommunications, technology, and material related stocks fell more than 1%.
New York stock market experts pointed out that the market may be aware of reality when it comes to interest rate projections.
“What’s driving the market this year is some optimism about global growth, including in Europe and China, along with expectations that rate hikes will be modest, or that rates will be cut after peaking,” Edward Smith, chief co-investment officer at Rasbons, told The Wall Street Journal. It seems to have worked,” he said.
“The sell-off of the past few days may be some realization that the market has been insane in terms of interest rates,” he said, considering how fast prices have risen. “We still have a long way to go.
(Inflation) will prevent the Fed from lowering interest rates,” he said.
“Good news has turned into bad news for the market, with a stronger-than-expected employment report,” said Mark Harquet, head of investment research at Nationwide. pointed out that
“It was too early to see institutional investors, who were largely wait-and-see, hurry to liquidate their losing positions late last week,” he said.
Individual investors appear rather calm and relatively cautious while a lot of emotions are spurring institutional investors,” he added.
According to the Chicago Mercantile Exchange (CME) FedWatch, the probability of the US Fed raising the benchmark interest rate by 0.25 percentage points in March at the time of closing in the federal funds (FF) interest rate futures market recorded 93.7%.
This is down slightly from 97.4% the previous day.
Instead, the possibility of a 0.50 percentage point increase rose from 0% the day before to 6.3%.
The Chicago Board Options Exchange (CBOE) Volatility Index (VIX) showed 19.43, up 1.10 points (6.00%) from the battlefield.
/yunhap news
