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The New York Stock Exchange closed weakly in the red on Wednesday, after a mixed session, pending a key figure for US inflation on Thursday and as the Fed confirmed its determination to fight this price hike.
In the last few minutes of trading, the indices have slipped into negative territory, the Dow Jones index lost 0.10% to 29,210.85 points, the Nasdaq 0.09% to 10,417.10 points and the broader S&P index 500 fell 0.33% to 3,577.03 points. The publication of the minutes of the Fed’s latest monetary meeting (the “minutes”) confirmed the strong determination of the US central bank to fight inflation by raising interest rates at the cost of slowing growth and the labor market.
“An unacceptable level”
The tightening of monetary policy must continue “despite the slowdown in the labor market”, because inflation (8.3% in August over a year, according to the CPI index) is at an “unacceptable” level, said the Monetary Committee. But this firm decision has not moved the market more than reason, which, according to analysts, has already taken into account the institution’s determination. “The Fed minutes didn’t tell us anything new that the market didn’t already know,” Peter Cardillo of Spartan Capital told AFP. The members of the Federal Reserve (Fed) “reiterated that they are on track to keep rates high and intend to raise them again, these two points do not change the outlook”, added the analyst.
Edward Moya of Oanda even saw the minutes as a sign of optimism for the markets as some Fed officials insisted on the need to “calibrate” the pace of rate hikes “in order to mitigate the risk of significant negative effects on the economic outlook. “. Markets will be keeping an eye on the CPI inflation index on Thursday, before the stock market opens, which is expected to drop slightly over a year to 8.1%, but still above 8% for the seventh consecutive month. , according to analysts. Wholesale prices (PPI index), published on Wednesday, returned to rise in September, gaining 0.4% against -0.2% in August and + 0.2% expected.
Straighten the pound
In one year, however, they slowed to 8.5%, demonstrating, according to Peter Cardillo, that “inflation has probably peaked at the level of producer prices”. Investors also closely followed the ups and downs of the UK bond market, after the Bank of England confirmed the words of its Governor Andrew Bailey, in Washington the day before, indicating that its emergency Treasury purchases would cease. Friday. But the British monetary authorities remain under pressure to reconsider this decision. “I wouldn’t be surprised if the BoE ended up hitting rates dramatically, by a full percentage point, both to fight inflation and to save the pound,” judged Peter Cardillo.
The British currency rallied on Friday against the greenback, to $ 1.1096 (+ 1.18%) around 20:00 GMT. US bond yields on 10-year Treasury bills fell to 3.89% from 3.94% the previous day. The dollar held up (+ 0.5% for the dollar index), while the price of oil recorded a sharp drop of more than 2%, frightened by inflation and its possible impact on demand. Listed, most of the eleven S&P sectors declined, especially utilities (-3.42%), real estate (-1.39) and materials (-0.80%). US snack and beverage giant Pepsico was up 4.18% after posting better-than-expected third-quarter revenue, helped by rising prices, and raised its full-year growth forecast.
The Moderna lab rose 8.28% after partnering with German group Merck to develop and commercialize a messenger RNA vaccine for patients at high risk of skin cancer recurrence. Shares of cruise lines rose in concert after a string of better valuations by analysts, whether Norwegian Cruise (+ 11.61%), Royal Caribbean (+ 11.48%) or Carnival (+ 10.09%) while these stocks had dropped significantly in the past few weeks. Uber (+ 5.35%) and Lyft (+ 5.59%) have largely recovered after being beaten the day before in the wake of a US administration plan to change workers’ status as gig economy employees .
