Stock market: Wall Street closes lower and fears a tightening of the Fed

Stock market: Wall Street closes lower and fears a tightening of the Fed

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MARKET REVIEW. The New York Stock Exchange closed sharply lower on Monday, concerned about the US central bank’s (Fed) reaction to better-than-expected macroeconomic data.

Canada’s main stock index closed nearly 1.2% lower due to falling oil prices.

To (re)consult market news

Stock Indices at Closing

In Toronto, the S&P/TSX it fell 243.40 points (-1.19%) to 20,242.26 points.

In New York, the S&P500 it fell 72.86 points (-1.79%) to 3,998.84 points.

the nasdaq it fell 221.56 points (-1.93%) to 11,239.94 points.

the DOWN it fell 482.78 points (-1.40%) to 33,947.10 points.

the loon it fell from US$0.0066 (-0.8831%) to US$0.7359.

the oil fell US$2.61 (-3.26%) to US$77.37.

L’Prayed fell US$28.10 (-1.55%) to US$1,781.50.

the bitcoins closed with a drop of US$142.58 (-0.83%) to US$16,969.40.

The context

Already misguided even before the opening, Wall Street recently welcomed the publication of the ISM activity index in services for the month of November in the United States, which came out at 56.5%, well above the expected 53.7%.

“The service sector is holding up better than manufacturing, which is more sensitive to financial conditions” and rising interest rates, replied Kieran Clancy of Pantheon Macroeconomics.

The ISM index is in line with the US employment report released on Friday, which reported 263,000 job creations, versus the 200,000 expected by economists.

Given these data, investors now expect the Fed’s key rate to rise more than expected, raising the likelihood that the economy will slow, according to Art Hogan of B. Riley Wealth Management.

The general impression was reinforced by an article in the Wall Street Journal that the Fed could raise its key rate even higher, beyond 5%, and keep it higher for longer.

The article’s author, Nick Timiraos, successfully forecast the last four Fed Policy Committee decisions on its key rate, in June, July, September and November.

The 10-year US government bond yield rose sharply to 3.59% from 3.48% on Friday.

Monday, the night between the 2-year-olds and the 10-year-old, the first is at the bottom of the second, at the highest level after 41 years, which indicates that the operators see the rhythm of the croissance strongly slow down. middle term.

Also, having long welcomed the easing of sanitary restrictions in China, the New York market expects “this will increase demand for raw materials, which could be inflationary,” according to Art Hogan.

Overall, after gaining almost 15% from an early fall low, the S&P 500 is struggling to find a second wind.

On the coast, You’re there suffered (TSLA, -6.37% to US$182.45), weakened by the information that the electric vehicle manufacturer has decided to reduce production of its model and in China, due to high inventories and low demand in this market.

Always in the technological department, Amazon (AMZN, -3.37% to US$91.01), Microsoft (MSFT, -1.89% to US$250.20) and the semiconductor maker broadcom (AVGO, -1.88% to $530.64), which publishes its results on Thursday, were penalized.

Rolled over for more than a year due to a regulatory tightening and the authorities’ zero COVID-19 policy, Wall Street-listed Chinese stocks have continued to rise, as have online trading platforms. alibaba (BABA, +0.51% to $90.52) and (JD, +0.92% to $59.18).

Activision Blizzard rose (ATVI, +0.75% to US$76.33), while according to the New York Posta dissent would arise within the US Competition Authority (FTC) on whether or not to challenge Microsoft’s acquisition of the video game publisher.

The group VF Corporation, which notably owns the Van’s and Timberland brands, fell (VFC, -8.16% to $28.93), following a profit warning, attributed to a slowdown in demand in North America, but also in Europe and in China. The stock was also affected by the surprise announcement of CEO Steve Rendle’s departure.

The shadow of the Fed also weighed on black gold, which fell despite the entry into force of the European embargo and the capping mechanism, both directed at Russian oil.

The move penalized the entire sector, particularly exxonmobil (XOM, -2.74% to $106.85), Chevron (CVX, -2.47% to US$176.56) or halliburton (HAL, -5.27% to $36.82).

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