Stocks New York: Fluctuations after the previous day’s slide | 06/29/22

NEW YORK (awp international) – Investors’ renewed fears of a recession were followed by a mixed start on Wednesday on the US stock exchanges. After there had been a strong setback the day before, especially in the technology sector, investors remained nervous. The indices on the Nasdaq in particular changed their signs in early trading.

The leading index Dow Jones Industrial, which started quite stably, increased by 0.52 percent to 31,108.58 points after a little more than one hour of trading. Other New York indices caught up on their early losses: the tech-heavy Nasdaq 100 percent was up 0.49 percent to 11,695.21 points, while the broader S&P 500 rose 0.28 percent to 3,832.15 points.

The day before, dwindling consumer confidence had fueled the current concern that the USA could slide into a recession, also under the influence of rising interest rates. On Wednesday it was reported that the US economy contracted slightly more than previously estimated at an annualized 1.6 percent in the first quarter.

Investors remained nervous because of their fear that the US Federal Reserve might not be able to combat high inflation with rapidly rising interest rates without jeopardizing economic development at the same time. US Treasury chief Jerome Powell said he was confident on Wednesday. Speaking at an ECB forum, the US economy is in strong shape to fight inflation while keeping the job market healthy.

“Central banks are walking a very fine line and to some extent dictating market sentiment,” said Barclays equity strategist Emmanuel Cau. “It appears the market is in a tug-of-war between hope that we are nearing the peak of inflation and interest rates and the challenge of a slowing economy and a possible recession.”

Among the individual values, the shares of the electric car manufacturer Tesla slipped by 2.9 percent. According to circles, the manufacturer could cut more jobs because of the current economic crisis. According to this, 200 employees who are currently working on an autopilot project in an office in California are to go.

After a relatively good run recently, Fedex investors were no longer able to enjoy new medium-term targets. The shares of the US logistics group slipped by 3.6 percent, although it has made further growth for the next three years. In addition, profitability is to be further increased.

Bad news came from retailer Bed Bath & Beyond, which reported a bigger-than-expected loss for the fiscal first quarter and is now embarking on a change of management. On the market it was said that the papers had recently become an object of speculation among private investors who organize themselves on the Internet. The hope of rapidly rising prices is now suddenly changing. With a price slump of almost 21 percent, they reached the lowest price level since May 2020.

The shareholders of Carnival, who were recently able to look forward to a price recovery, also experienced a strong setback. A wave of profit-taking followed on Wednesday in the cruise operator’s papers, and the course in New York fell by 15 percent. Morgan Stanley analysts warned the shares could become “worthless” if demand for cruises experiences another demand shock.

A positive exception was Amazon stocks, which rose 2.7 percent on the Nasdaq. JPMorgan analyst Douglas Anmuth reduced his assumptions for US Internet stocks and thus the Amazon target price to $175 due to current consumer concerns. For the expert, however, Amazon remains one of the “top ideas” in the sector. The new target still promises 60 percent upside potential.

The online giant also referred to an optimistic study by the analysis company Redburn, which sees a spin-off of Amazon’s cloud division as an attractive option. The study speculates that it could soon be worth $3 trillion. This would be almost three times the current value of the entire retail group.

There were also price gains of 5.6 percent at the food company General Mills. Shares rose after a statement by the company that price hikes and easing supply chain disruptions would soon boost sales again./tih/zb

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