US MARKET / Wall Street stabilized a bit ahead of Fed decision | News

NEW YORK (Dow Jones) – Wall Street stabilized somewhat on Tuesday after declines in previous sessions. However, traders did not want to talk about a trend reversal, also with new inflation data in mind. Previously, the market-wide S&P 500 index lost nearly 10 percent in just four days, fueled by concerns over interest rates, inflation and recession, and then went into bearish mode. “Sentiment is bad. History does not bode well for the market if it falls into a bearish market, said Boston Partners analyst Michael Mullaney.

Meanwhile, inflation continued to rise, although US producer prices did not rise as sharply as feared. The rise in producer prices was just below market expectations. The Dow Jones index fell 0.5 percent to 30,365 points, the S&P 500 fell 0.4 percent and the Nasdaq Composite recovered slightly by 0.2 percent. The New York Stock Exchange saw 1,319 (Monday: 187) increases compared to 1,995 (3,169) losses. 120 (78) titles were closed unchanged.

Concerns about interest rates and inflation continued to dominate the market. Investors did not want to take any risk in connection with Wednesday’s decision by the US Federal Reserve on interest rates. Wall Street continues to decline as May’s consumer price data spook the market with greater-than-expected growth. High inflation has fueled fears that the US Federal Reserve will raise interest rates even more aggressively than previously assumed, thus driving the economy into recession. Many market participants now expected a 75bp rate hike on Wednesday, although the Fed had previously signaled a 50bp rate hike.

“In my opinion, a surprising increase by 75 basis points would be happy. The question now is whether the economy can avoid a recession, ”said investment strategist Nancy Tengler of Laffer Tengler Investments. According to traders, the further development of the market depends on the answer to this question. The NFIB Small Business Sentiment Index declined slightly in May, as expected, but still hitting its lowest level since April 2020.

The dollar and the crops march on

The dollar continued to rise after the price data, which overnight already reached an all-time high in 19 years, fueled by speculation about a more aggressive interest rate hike by the Fed. The dollar index rose by another 0.4%, supported by further increases in market interest rates.

Bond market remained under pressure. Yields, which had risen rapidly in the previous days, continued to rise. The yield on 10-year bonds rose to the highest level since 2011. The yield curve steepened slightly again, although the spread between the US 2-year and 10-year government bond yields remained at a few basis points. There was still a risk of a reversal of the yield curve, with short-term bonds yielding higher returns than long-term bonds. This is widely perceived in the market as a recession precursor.

Oil prices abandoned their initial increases – weighed down by Iran’s optimistic statements about a possible deal in the nuclear dispute. Such a move could lead to a reduction in sanctions and the introduction of more Iranian oil to the market. Oil prices rose more markedly initially. OPEC largely did not change the oil demand forecast for 2022, but lowered the supply forecast. In addition, the cartel saw a decline in production due to a significant decline in Libyan oil supplies.

The strong dollar and rising market interest rates weighed on gold again, which fell to a four-week low.

Fedex increases quarterly dividends by more than 50 percent

Among the individual shares, Oracle grew by 10.5 percent. The software company posted surprisingly strong results in the fourth quarter of the fiscal year. In Boeing (+ 5.4%), the data on deliveries and orders were received positively. Shareholders of the Fedex courier company can count on a much higher dividend. The quarterly dividend will be increased by 53%. The price jumped by 14.4 percent.

Abercrombie & Fitch closed apartment. Before Tuesday’s investor event, the fashion chain published its mid- and long-term goals, which were initially well received. Then the course resumed. Restructuring plans and associated fees pushed Coinbase down 0.8 percent. The crypto exchange sheds 1,100 jobs, roughly 18 percent of the workforce.

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INDEX last + / -% absolute + / -% YTD

DJIA 30 364.83 -0.5% -151.91 -16.4%

S&P 500 3 735.59 -0.4% -14.04 -21.6%

Nasdaq Comp. 10 828.35 + 0.2% 19.12 -30.8%

Nasdaq-100 11 311.69 + 0.2% 23.37 -30.7%

US bonds

Term Profitability Bp to VT Profitability VT +/- Bp YTD

2 years 3.41 +6.0 3.35 268.4

5 years 3.59 +10.9 3.48 232.9

7 years old 3.58 +12.6 3.45 213.6

10 years old 3.48 +11.4 3.36 196.5

30 years old 3.43 +8.3 3.35 153.3

FOREX last +/-% Tuesday 8:11 Mon 17:25% YTD

EUR / USD 1.0412 + 0.0% 1.0419 1.0434 -8.4%

EUR / JPY 140.76 + 0.6% 140.38 139.96 + 7.6%

EUR / CHF 1.0427 + 0.4% 1.0385 1.0399 + 0.5%

EUR / GBP 0.8687 + 1.3% 0.8565 0.8578 + 3.4%

USD / JPY 135.19 + 0.6% 134.72 134.14 + 17.4%

GBP / USD 1.1985 -1.2% 1.2169 1.2165 -11.4%

USD / CNH (offshore) 6.7552 -0.4% 6.7540 6.7702 + 6.3%

Bitcoin

BTC / USD 22 186.04 -3.6% 22 915.37 23 100.82 -52.0%

ROHL last VT-Settl. +/-% +/- USD% YTD

WTI / Nymex 118.37 120.93 -2.1% -2.56 + 62.6%

Brent / ICE 120.47 122.27 -1.5% -1.80 + 59.7%

METALS last day before +/-% +/- USD% YTD

Gold (spot) 1,807.64 1,819.20 -0.6% -11.56 -1.2%

Silver (Spot) 20.99 21.08 -0.4% -0.09 -10.0%

Platinum (Spot) 922.27 936.28 -1.5% -14.01 -5.0%

The future of copper 4.13 4.21 -1.9% -0.08 -7.0%

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Contact the author: maerkt.de@dowjones.com

DJG / DJN / flf

(END) Dow Jones Newswires

June 14, 2022 4:07 PM ET (20:07 GMT)

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