(ABM FN-Dow Jones) The US stock markets stayed close to home on Friday and closed somewhat mixed. Despite this, the S&P 500 lost for the third week in a row, posting a week loss of nearly 2 percent.
The leading S&P 500 index fell fractionally on Friday to 4,370.04 points, the Dow Jones index closed 0.1 percent higher at 34,510.38 points and the Nasdaq lost 0.2 percent at 13,290.78 points.
The US 10-year interest rate fell back somewhat on Friday to 4.25 percent, after annual records were tightened to above 4.30 percent this week, hitting the highest level since 2008.
The recent rise in interest rates is “moving the market,” senior market strategist Scott Wren of the Wells Fargo Investment Institute said on Friday. The drop in stock prices this week is “primarily linked to higher bond yields and the potential for the Fed to do more”. This is done by tightening monetary policy in order to reduce inflation.
“We see even more downside risk” in stocks following the rally earlier this year, Wren said, noting the Wells Fargo Investment Institute’s expectation that the S&P 500 index will close at 4,100 by 2023. That is about 6 percent lower than the current level of the index.
The market’s attention has also turned to the troubles in China, after builder Evergrande filed for bankruptcy protection in US courts and the People’s Bank of China had to step in to help its native currency.
Concerns about the solvency of Evergrande’s peer Country Garden “have not helped either and concerns about contamination of the shadow banking system have added to uncertainty,” Michael Hewson, chief market analyst at CMC Markets UK, said in a note. This after Chinese asset manager Zhonghzi missed a coupon payment.
The calendar is fairly full next week, but most attention will be focused on the meeting of central banks in Jackson Hole, which takes place at the end of next week.
“Policymakers will need to consider whether China is approaching its ‘Lehman’ moment and how rising bond yields will affect the global economy,” said Frank Vranken, chief investment officer of Edmond de Rothschild Europe.
The euro/dollar was virtually unchanged at 1.0871 on Friday.
Oil prices were also negatively affected by the problems in China and experienced the first weekly loss after 7 weeks of increase. The September futures for a barrel of West Texas Intermediate crude closed 1.1 percent higher on Friday at $81.25 on the New York Mercantile Exchange.
Company news
Applied Materials performed better than expected in the third quarter and the outlook for the fourth quarter was also positively received. The share of the supplier in the chip sector rose 3.7 percent.
Deere managed to beat expectations in the past quarter and the outlook was raised again. The new outlook is clearly above analyst consensus. Nevertheless, the share of the manufacturer of agricultural machinery fell and had to give up more than 5 percent.
WeWork is implementing a stock split of 1 new share for 40 existing shares to bring the share price back above $1, which is required to remain listed on the NYSE. The stock closed more than 11 percent lower at $ 0.14.
Shares of e-commerce company Farfetch suffered a major price blow after disappointing quarterly figures. The share was more than 45 percent lower.
Bron: ABM Financial News
2023-08-18 20:20:00
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