Stocks in New York continue their downtrend

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the essentials in brief

• The sell-off on the US stock exchanges continued on Thursday.

At least the indices limited the losses in late trading. The leading index Dow Jones Industrial fell by 0.33 percent to 31,730.30 points – another low since the beginning of March last year.

In this stock market year, the setback has widened to almost 13 percent. If Friday’s sell-off continues, the Dow could face its worst trading week since October 2020.

The Nasdaq 100, which is dominated by tech companies, held up comparatively well with minus 0.18 percent to 11,945.50 points. Since the beginning of the year, however, the index has lost almost 27 percent. Above all, rising capital market interest rates are causing investors to sell tech stocks. The market-wide S&P 500 closed 0.13 percent lower at 3930.08 points.

The losses on the stock markets are mainly due to the great uncertainty as to how quickly and how strongly the US Federal Reserve will raise interest rates. “There is a fear that the key interest rate will rise too quickly and that the economy will be plunged into recession,” wrote economist Cyrus de la Rubia from Hamburg Commercial Bank.

Lockdowns in China are causing problems for Apple

Tech stocks like Apple and Microsoft continued to fall in the Dow. Apple shares fell 2.7 percent to their lowest level since mid-October. They had been replaced the day before by the Saudi Arabian oil company Saudi Aramco as the most valuable company in the world. The important iPhone supplier Foxconn from Taiwan had to suspend production in Shenzhen, China, because China has imposed extensive corona lockdowns. According to reports, the Apple supplier Unimicron is also said to have suspended production.

In addition, a study by the US bank Wells Fargo weighed on the papers of General Motors (GM) and Ford. GM lost 4.6 percent and Ford 3.0 percent. Analyst Colin Langan argued that EV production costs are likely to rise sharply. Higher raw material prices alone added an estimated $12,600 to the total cost of a GM Silverado vehicle. The papers of the electric car producer Tesla also fell.

Initially, the Beyond Meat papers were also under great pressure after disappointing quarterly figures from the manufacturer of meat substitutes. The price collapsed by more than 20 percent in early trading, and in the end the loss was still a good four percent. From the record high at the beginning of 2021, the papers have already lost more than 90 percent.

The euro had to take a beating and fell to its lowest level since the beginning of 2017. Most recently, the common currency cost 1.0373 US dollars. The European Central Bank (ECB) had previously set the reference rate at 1.0408 (Wednesday: 1.0553) dollars. The dollar had thus cost 0.9608 (0.9476) euros.