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NEW YORK (Dow Jones) – On Thursday, the US stock market repeated the pattern from the previous day. Fresh inflation data initially panicked investors, triggering a massive flight from the stock market shortly after the starting bell before a more rational stance prevailed. Occasional buyers took the opportunity to get in at low prices.
Forty-year inflation was still holding investors. However, investors relaxed a bit more about the possible reaction of the Federal Reserve to inflation. While the surprisingly drastic rise in consumer prices on Wednesday fueled speculation that the Federal Reserve may raise its main interest rate by 100bp at the next meeting instead of the 75bp expected by the majority, the option was priced less sharply on Thursday. although headline producer price inflation was also above forecast. In the base rate, however, producer prices increased less than expected. The soothing words of Fed Governor Christopher Waller, who slackened expectations of the move by 100 basis points, also helped ease tensions.
Concerns about interest rates and the ensuing recession pushed the Dow Jones index down 0.5 percent. However, at the daily minimum, the index was a good 2 percent. lower. The S&P 500 lost 0.3 percent while the Nasdaq Composite closed the flat. According to preliminary data, Nysa had 831 (Wednesday: 1,390) winners, compared to 2,416 (1,789) losers. 127 (191) titles closed unchanged.
In addition to producer prices, weekly labor market data were published. They turned out to be a bit weaker than expected. Both dates did not allay investors’ concerns about the Fed’s actions.
The big banks are disappointing
The beginning of the US reporting season was also in the spotlight. For the broader market, market watchers are expecting a 4.3 percent increase in earnings in the second quarter, and therefore the smallest increase in the S&P 500 index since the fourth period of 2020.
The quarterly reports by JP Morgan and Morgan Stanley disappointed. “In the absence of macroeconomic change, we do not expect the results to change investors’ cautious stance on the banking sector,” said Bank of America strategists. Billions of dollars in NPL reserves contributed to the sharp decline in JP Morgan’s profits in the second quarter. Both profits and revenues fell short of analysts’ expectations. Shares fell 3.5 percent.
Morgan Stanley (-0.4%) fared better. Weak investment banking and higher costs drove the US bank’s profits down in the second quarter. Profits and revenues were below market forecasts.
United Insurance increased by 7.8 percent. Management wants to explore options such as selling the company, merging or divesting subsidiaries – as alternatives to raising fresh capital. Azenta distorted by 16.7 percent. The measurement and automation expert lowered the forecast for the third quarter and now expects a greater loss than expected. Ocean Power Technologies showed minus 1.3 percent. The alternative energy producer saw sales grew, but was still in the red.
Gold offended despite high inflation
Waller’s comments slowed the rise in bond and dollar yields. However, the bond market yield curve remained clearly inverted, sending a signal of recession.
The dollar jumped to another 20-year high on a wave of rising market interest rates and speculation about rate hikes, and the dollar index gained another 0.6%. Sometimes the euro fell well below the dollar parity, but later recovered slightly.
On the other hand, the price of gold remained under pressure. The price of the troy ounce fell to its lowest levels since August 2021. It was weighed down by rising expectations of interest rate hikes and a stubbornly strong dollar.
The strength of the dollar and fears of a recession drove oil prices further away from the $ 100 mark. However, as the stock markets recovered, they significantly reduced their losses and continued to recover from losses in e-commerce. Spartan Capital analyst Peter Cardillo estimates that US light oil, type WTI, will reach $ 90 a barrel in the short term if current resistance does not persist.
INDEX last + / -% absolute + / -% YTD
DJIA 30 630.17 -0.5% -142.62 -15.7%
S&P 500 3 790.38 -0.3% -11.40 -20.5%
Nasdaq Comp. 11 251.19 + 0.0% 3.60 -28.1%
Nasdaq-100 11 768.40 + 0.3% 39.87 -27.9%
Term Profitability Bp to VT Profitability VT +/- Bp YTD
2 years 3.13 -1.6 3.15 240.2
5 years 3.07 +4.1 3.03 181.4
7 years 3.05 +3.2 3.02 161.2
10 years 2.96 +2.7 2.93 145.1
30 years old 3.11 -0.8 3.12 121.1
FOREX last +/-% Thu 8:02 Wed 17:32% YTD
EUR / USD 1.0015 -0.4% 1.0023 1.0093 -11.9%
EUR / JPY 139.11 + 0.7% 138.71 138.59 + 6.3%
EUR / CHF 0.9851 + 0.0% 0.9845 0.9866 -5.1%
EUR / GBP 0.8470 + 0.2% 0.8456 0.8463 + 0.8%
USD / JPY 138.91 + 1.1% 138.43 137.32 + 20.7%
GBP / USD 1.1825 -0.6% 1.1859 1.1924 -12.6%
USD / CNH (offshore) 6.7571 + 0.5% 6.7375 6.7189 + 6.3%
BTC / USD 20 540.21 + 3.2% 20 167.59 19 482.77 -55.6%
ROHOEL the last VT-Settl. +/-% +/- USD% YTD
WTI / Nymex 96.32 96.30 + 0.0% 0.02 + 33.5%
Brent / ICE 99.53 99.57 -0.0% -0.04 + 32.9%
GAS VT close +/- EUR
Dutch TTF 174.50 180.50 -3.3% -6.01 + 33.6%
METALS last day before +/-% +/- USD% YTD
Gold (spot) 1,710.04 1,735.53 -1.5% -25.49 -6.5%
Silver (Spot) 18.45 19.22 -4.0% -0.77 -20.9%
Platinum (Spot) 852.84 858.50 -0.7% -5.66 -12.1%
Future Miedź 3.24 3.33 -2.7% -0.09 -27.2%
YTD at the end of the day
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(END) Dow Jones Newswires
July 14, 2022 4:11 PM ET (20:11 GMT)
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