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New York (AFP) – The New York Stock Exchange closed lower on Friday as investors fear a recession caused by excessive monetary tightening.
The Dow Jones fell 0.85%, the Nasdaq lost 0.97% and the broader S&P lost 1.12%.
The three leading New York market indexes thus closed at their lowest closing level since early November, more than a month ago.
“Investors cannot stand aggressive rhetoric from central bankers this week amid a clear deceleration in the economy,” Oanda’s Edward Moya said in a statement.
The American central bank (Fed), like the European Central Bank (ECB) or the Bank of England reiterated this week that their fight against inflation was not over and that they would have to raise rates even more, to keep them higher than expected.
A series of negative macroeconomic indicators in the US also confirmed that the US economy was showing signs of fatigue.
PMI activity indices in services and the manufacturing sector both came in well below economists’ forecasts on Friday, each significantly below 50, reflecting a contraction in the economy.
“These data contributes to investors’ fears that central banks are going too far in their monetary tightening,” said Edward Jones’ Angelo Kourkafas. “They fuel the idea that the pace of growth will slow significantly in 2023.”
While traders are concerned about the Fed’s speech, traders nonetheless expect the institution to frankly lift its footing beyond 2023 as the US economy winds down.
The central scenario is that of a key rate raised by just half a percentage point by June, i.e. less than forecast a week ago.
Short-term bond rates therefore fell on Friday. The yield on 2-year US government bonds, considered representative of monetary policy, settled at 4.17%, versus 4.23% on Thursday.
At the rating, Meta (+2.82% to $119.43) benefited from an increase in the recommendation from JPMorgan analysts, encouraged by what they see as an improvement in the group’s financial discipline.
General Motors backtracked (-3.91% to $36.15). The American Highway Safety Agency (NHTSA) has announced the opening of an investigation into the vehicles of its subsidiary Cruise, which specializes in autonomous driving, after several accidents related to sudden braking or sudden stop.
Software publisher Adobe jumped 2.99% to $338.54 after posting better-than-expected quarterly net income, with growth driven by its remote computing (cloud) services. The San Jose (California) company also reported better-than-expected forecasts for the current quarter.
The Chinese group Lanvin Group, which notably controls the fashion houses Lanvin and Sergio Rossi, has continued its chaotic course, in the aftermath of its listing on the New York Stock Exchange.
After plunging 22.93% on Thursday, the first day after the merger with listed company Primavera Acquisition Corporation, Lanvin Group fell 31.06% to $10.00. The transaction allowed the company to raise more than $150 million in new money.
The collapse of the Novavax laboratory continues (-2.56% to 11.03 dollars), weighed down by the revision of the agreement with the British authorities on the purchase of anti-Covid vaccines. The expected volumes have been halved in the new version of the agreement.
In addition, this biotechnology plans to issue new shares and convertible bonds in the total amount of up to $250 million in total, which will dilute the shares of existing shareholders.
In two sessions, Novavax stock fell more than 35%.
© 2022 AFP
