:format(jpg):watermark(cloudfront-eu-central-1.images.arcpublishing.com/ipmgroup/EF665FJJCNGHFFHRRMWR57UKMI.png,0,30,0)/cloudfront-eu-central-1.images.arcpublishing.com/ipmgroup/U7GMKR2S4NA3DENCOMHJ5CEPZM.jpg "The New York Stock Exchange in the red at the opening, drowned by the many economic indicators and company results")
The New York Stock Exchange opened higher, before turning around in the first few minutes, weighed down by a generally gloomy mood, fearing that the American Central Bank (Fed) would act out of time to curb inflation. All the indices had initially gone into the green, but around 3:05 p.m. GMT, the Dow Jones dropped 0.89%, the tech-heavy Nasdaq index, 0.67%, and the broader S&P 500 index, 0.63 %.
The Nasdaq is approaching the -20% mark (-17% currently) since its record high in early November.
“Currently, there are more negative than positive reasons when you think about the market. It’s a question of mindset”, summarized Gregori Volokhine, president of Meeschaert Financial Services.
“Once again, operators have a lot of information to digest”, commented, in a note, Patrick O’Hare, of Briefing.com. “It’s neither all bad nor all good. So the clues are volatile.”
Before the open, the market had seen a series of lackluster macro indicators, from still high inflation at 5.8% YoY (PCE index), as expected, to rising household incomes less stronger than expected in December (+0.3%).“The inflation figure is not going to change the policy of the Fed. It is already taken into account by the Fed and the market.”
Over the course of the sessions, Wall Street gets used to the idea that its slide in recent weeks does not at all move the American Central Bank (Fed).“You still have to get it in your head that in the short term the Fed is not going to adopt a more accommodating rhetoric to help the markets”, hammered Gregori Volokhin, “certainly not.”Since then, “the market regrets this Fed which, for a long time, was there as soon as things got complicated.”
The New York Stock Exchange also kept in mind the Ukrainian crisis and the effect it has already had on energy prices, with oil at its highest for more than seven years.“A sharp rise in energy prices will slow the economy down sharply, whether in Europe or here”, warns the manager. “And the market is afraid that the Fed will act with closed eyes for a while, not seeing that the economy is slowing down.”
Results flowing in from all sides
On the table of values, the new wave of company results offered, here too, a contrasting panorama, with figures often of high quality but sometimes disappointing forecasts and, in some cases, eroded margins.
Featured, Apple is riding high on its record results (+3.28% to 164.44 dollars), better than expected despite supply difficulties. The worst seems to be over in this area for the Apple giant, which expects less disruption this quarter than the previous one.
Oil tanker Chevron missed the profit target, although its earnings were better than expected. Despite a profit of $15.6 billion and record production in 2021, the stock was down (-4.17% to $129.73), with some investors taking profits after strong growth in recent weeks.
Also shunned (-4.23% to 203.20 dollars), Caterpillar. The American manufacturer of construction machinery, equipment and materials, published better than expected earnings, but Wall Street held it against it for degraded margins, linked to the sharp increase in its costs.
Already a symbol of the market correction for more than a month, the brokerage platform Robinhood sank even further into the depths (-3.83% to 11.16 dollars), punished after worrying results. The company, symbol of the enthusiasm of small shareholders for the stock market during the pandemic, is losing active users and has seen the revenue generated per user fall by 39% over one year.
Overall, technology and growth stocks lost ground again, like Intel (-3.19%), AMD (-1.99%) or Nvidia (-2.11%). Like the day before, the electric vehicle sector was also the subject of sales, like Tesla (-1.23%), Lucid (-6.90%), Nikola (-1.22%) or Rivian (-4.25%). The portfolio rotation took place in favor of traditional industry stocks, such as US Steel (+5.76) and Cleveland-Cliffs (+0.56%), or the American chemicals giant Dow (+0, 45%).
The credit card specialist Visa also stood out (+7.15% to 220.88 dollars) after publishing results better than analysts’ forecasts and thanks to optimistic comments on the trajectory of the economy out of pandemic.
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