(ABM FN-Dow Jones) US stocks entered the weekend significantly lower. The S&P 500 fell 1.9 percent Friday at 4,418.64 points, the Dow Jones index lost 1.4 percent to 34,738.06 points and the Nasdaq lost 2.8 percent to 13,791.15 points.
Fears about the pace at which the Fed will raise interest rates continued to weigh on the mood Friday.
On Thursday it was announced that inflation in the United States had risen further in January. Consumer prices rose 7.5 percent year-on-year. Economists expected an increase from 7.0 percent to 7.2 percent. The US 10-year yield then rose to 2.05%, the highest level in more than two years. On Friday, the interest rate was at 1.93 percent.
The ever-increasing inflation may force the Fed to raise interest rates more or larger than the market currently expects.
St. Louis Fed Chairman James Bullard chimed in on Thursday by saying he would like the Fed to raise interest rates by 1 percentage point during the next three central bank policy meetings.
By contrast, Loretta Mester, president of the Cleveland Fed, said she is unlikely to support an increase of more than 0.25 percentage points next month.
“With the central bank appearing to be lagging behind, we believe that policy will need to be adjusted quickly, but not in too big steps, as this would pose significant risk to markets and the economy,” he said. Market analyst Rick Rieder of BlackRock.
“So while the time has come to persistently and aggressively roll back policies from accommodative to more neutral and appropriate ones, the output will be a tough challenge for policy makers,” he added.
According to market analyst Florian Ielpo of Lombard Odier Investment Managers, inflation has become a political issue. “This concerns us. We see an increasing risk of monetary policy errors. This is the biggest risk we see in 2022,” he said.
Stocks in New York sank further towards the closing bell after American media reported that Russian President Putin has finally decided to invade Ukraine. He is said to have also communicated this to the Russian army.
National security adviser to US President Joe Biden, Jake Sullivan, said Friday that a Russian invasion could begin “any moment”.
Market experts warn that the geopolitical risk is great, given Russia’s extensive troop build-up. As a result, the oil price rose sharply on Friday. At a settlement of $93.10, a barrel of West Texas Intermediate became almost 4 percent more expensive.
An actual raid could push oil prices towards $100, analysts say. WTI rose to about $95 on Friday.
The euro/dollar traded at 1.1341 Friday evening.
Company news
Shares of Novavax rose 3 percent after the drug company announced that its vaccine candidate against Covid-19 has an 80 percent efficacy in teens.
Meanwhile, Pfizer and BioNTech are delaying an application for approval to administer their vaccine to young children, it was announced Friday. Pfizer rose slightly and BioNTech gained about 2 percent.
Comcast’s NBC Universal is finalizing a plan to drastically change its partnership with Hulu. Part of the plan is to stream high-profile programs on its own streaming platform from now on. Comcast fell more than 2.5 percent.
Twitter lost more than 3 percent after the social media company reported an agreement with Morgan Stanley and Wells Fargo for accelerated share repurchases worth $2 billion. In total, Twitter will buy back $ 4 billion in its own shares, but half of that must be done quickly, it said in the annual figures earlier this week.
Astra Space closed about 15 percent lower after the group ended 26 percent lower on Thursday after one of its rockets experienced problems during the company’s first launch from Florida.
Bron: ABM Financial News
From Beursplein 5, the editors of ABM Financial News keep a close eye on developments on the stock exchanges, and the Amsterdam stock exchange in particular. The information in this column is not intended as professional investment advice or as a recommendation to make certain investments.
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