New York stocks: Wall Street continues to slide | 5/6/22

NEW YORK (awp international) – After the US job market report on Friday, Wall Street still won’t calm down. Investors remained cautious in anticipation of further interest rate hikes. The Dow Jones Industrial initially fell by up to 1.5 percent in a nervous opening session. With 32,667.36 points, he recently reduced his minus to one percent. In the course of the week he has lost almost one percent.

The fluctuations were even more pronounced on the Nasdaq stock exchange: the technology-heavy Nasdaq 100 lost 1.21 percent to 12,695.31 points after one hour of trading. While the Dow recently hit its lowest level since February, the Nasdaq index is now at its lowest level since early March 2021. Its daily loss on Friday is roughly in line with its weekly total.

Investors are currently facing three problems at the same time: slowing growth, higher costs and rising interest rates, said market strategist Sean Darby of investment bank Jefferies. Only on Wednesday did the US Federal Reserve raise interest rates by a further 0.50 percentage points.

“With their measures, the central banks also have to accept harmful side effects on the economy in the current situation. Fighting inflation now has priority,” said chief economist Ulrich Kater from Dekabank. While investors reacted with relief on Wednesday that the Fed’s interest rate hike had not been even higher, caution was called for again on Thursday because of the consequences of the interest rate hikes.

Accordingly, fresh economic data are viewed particularly critically – such as the US job market report at the end of the week. This showed that the US economy had created more jobs in April than expected. In addition, the unemployment rate stagnated and wages rose more slowly than forecast. “Again a significant increase in new jobs – the Fed remains under pressure,” commented analyst Tobias Basse from NordLB.

When looking at individual values, oil companies were once again a positive exception due to a rising oil price. As the debate over a European oil embargo on Russia rages on, prices were boosted by the US announcement that strategic oil reserves would begin to be refilled this fall. Chevron were among the best Dow stocks, up half a percent.

In contrast, it was a gloomy day for investors in the US sporting goods sector. While Under Armor shares slipped 23 percent by the numbers, Nike shares were also caught at a 5 percent discount on the Dow. Under Armor disappointed investors not only with a quarterly loss, but also with the full-year outlook. UBS analyst Jay Sole now sees a correction risk of up to 19 percent for earnings estimates on the market.

Meanwhile, the now record-low Peloton shares on the Nasdaq are not getting back on their feet. The papers of the fitness specialist, once traded as a big corona winner, fell again by nine percent on Friday. As the Bloomberg news agency wrote, citing circles, the company is currently looking for a large investor who could get in with 20 percent of the shares./tih/he

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