Tuesday , October 26 2021

Wall Street slows by the Fed and the barrel decreases



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(Reuters) – The New York Stock Exchange ended on a weak note on Thursday after the release of the Federal Reserve, which made monetary policy unchanged but supported the assumption of a December interest rate increase, while the New York Stock Exchange energy values ​​suffered due to falling oil prices .

While the Dow Jones index has just ended in positive territory, struggles rose 10.92 points, or 0.04%, to 26,191.22, Standard & Poor's 500, wider, yielding 7.06 points, or 0, 25%, to 2,806.83.

As for the Nasdaq Composite, it fell 39.87 points, or 0.53%, to 7,530.89.

The Fed has, as expected, left the target of funds unchanged at 2% -2.25%, but his statement noted that the US economy remained healthy, even if it showed slowing growth. business investment. .

For many observers, the surprise statement by the central bank shows that this is headed for further interest rate increases after the next meeting, December 18 and 19, which will be the fourth increase of the year.

Some expect, however, a change in tone after the October stock market correction.

"The Fed acknowledges that there is an economic slowdown, but that does not reduce it from a gradual increase – yet, however," said Jamie Cox, Harris Partner. Financial Group.

"Actually there is nothing that leads to what the market expects, namely" dove "speech, which is more similar to what we call a bullish status quo."

VALUE

The increase in interest rates was a priori that was favorable for the margin of credit institutions, the S & P financial stock index ended 0.32%. Inside the Dow, American Express rose 1.11%, JPMorgan Chase 0.81%.

On the downside, the energy sector lost 2.2% in response to a sharp decline in the oil market.

The decline on the Nasdaq was also explained by sanctions experienced by semiconductor giant Qualcomm: the title had lost 8.16%, estimates for important quarters including the holiday season had disappointed financial analysts.

The biggest decline in the S & P 500, generic drug specialist Perrigo fell 16.32% after reducing its annual income guidance because of the deteriorating outlook for its recipe product business.

D.R housing construction group Horton fell 8.97% and weighed on the sector after warning that rising house prices and lending rates weighed on demand. The PHLX sector index fell 2.37%.

Casino operator Wynn Resorts sold 13.13% after quarterly profit was below consensus and his comments about the slowdown in Macau. 11.17

On the upside, hotel search and TripAdvisor comparison sites have surged 15.26% after earnings were better than expected in the third quarter.

DAY INDICATORS

The market barely responded to the expected US jobless claims, which fell slightly last week to 214,000, the number of Americans receiving unemployment benefits remained at its lowest level. for more than 45 years.

EXCHANGE

Already rising before the release of the Fed's release, the dollar has strengthened its growth thereafter. At the end of the day, it rose 0.67% against a number of reference currencies.

The euro, yielding more than 0.5% to gain the greenback to 1.1364 dollars.

The single currency has suffered earlier in the session a downward revision of the European Commission's growth forecast, especially for Italy.

RATE

The Federal Reserve returns treasury yields as the prospect of a first interest rate increase benefiting from a shorter maturity: The two-year Treasury ends near 2.977%, the highest level for ten and a half years.

Five-year returns, on the other hand, earn more than three basis points to 3.088% after a 10-year peak at 3.098%.

The increase is less clear for long results. Ten years were shown at the end of the session at 3.237%, up more than two points on the day.

Futures contracts included a 78% estimate of the possibility of a quarter-point increase in the Fed fund interest rate on December 19, almost unchanged from Wednesday, according to the CME Group's FedWatch barometer.

OIL

US light crude (West Texas Intermediate, WTI) ended the day on the dollar decline, or 1.6%, to show, at 60.67 dollars, the lowest since March 14, also showing a decline of more than 20% from the peak of October 3.

Brent produced $ 1.42 (-1.97%) to $ 70.65, the lowest level since mid-August.

The Wall Street Journal reported, citing sources close to the case, that a think tank close to the Saudi government was studying the possible consequences of OPEC's market termination.

This information strengthens the already established downtrend, favored by many signs of increasing global supply that exceeds the announcement of Chinese import records.

SESSION IN EUROPE

European stock markets ended in an unorganized pattern and most did not change, because good results issued by several major banks on the continent were not enough to extend the upward movement that began the day before in response to the results of the American "midterm".

In Paris, the CAC 40 finished down 0.13% to 5,131.45 points and the German Dax fell 0.45% but Footsie in London rose 0.33%.

The EuroStoxx 50 index fell 0.26% but the FTSEurofirst 300 rose 0.04% and the Stoxx 600 rose 0.19%.

The insurance and banking sectors rose 0.95% and 0.8% respectively, supported by Commerzbank's better-than-expected quarterly results (+ 5.36%) and Banco BPM (+ 2.98%). and Societe Generale (+ 2.14%).

The automotive sector lost 1.09%, weighing on Dax. German producers have agreed to pay up to € 3,000 per vehicle as part of efforts to reduce diesel engine emissions. Volkswagen lost 2.36% and Daimler 1.9%.

(Marc Angrand, with Sinéad Carew in New York)

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