Initially, things are looking pretty good on Wall Street. There are signs of a slight recovery over the course of the day. But shortly before the end it is clear: The Dow Jones does not make it out of the red. US investors are too concerned about the recession.
There is no recovery in sight on Wall Street. The Dow Jones fell 0.4 percent to close at 29,134 points. Previously, the leading US index only peeked into the profit zone briefly before the mood changed again. In the meantime, it fell by 0.6 percent and, at 29,071 points, is as low as it was almost two years ago. The index had already fallen to a low for the year the day before and also entered “bear market mode” – it has lost more than 20 percent from its recent high. Also the S
“Equities have fallen sharply in value as the Fed has aggressively raised interest rates and indicated many more rate hikes are to come. Recession fears are mounting, making stock selection significantly more difficult,” said Fiona Cincotta, senior financial markets analyst at City Index. At the moment, however, it is more of a pause in the market sell-off than the beginning of something more positive, adds the participant. “Fundamentals remain the same and a recession is becoming more likely.”
On the foreign exchange market, the dollar is climbing slightly after the strong upward movement. The dollar index rose 0.1 percent. Analysts at UBS Global Wealth Management believe the dollar is likely to remain strong for longer as markets priced in a higher interest rate hike in the US amid widespread risk aversion. The dollar should benefit from its yield advantage and safe haven function, according to UBS.
After the latest levies, oil prices are up by up to 2.5 percent. WTI had lost around 8 percent in the past two sessions amid concerns about falling demand. Now the better-than-expected US economic data are providing some relief and fueling hopes of increasing oil demand. Also providing some support is an approaching hurricane in the Gulf of Mexico, which has prompted oil companies to temporarily halt production at some oil platforms.
Yields continue to rise in the bond market, albeit at a somewhat slower pace. Initial slight losses were quickly recovered. The 10-year yield rose 3.0 basis points to 3.95 percent. It is thus approaching the 4 percent mark that was last exceeded in 2008.
Among the individual stocks, Faraday Future is up 5.9 percent. The electric car startup has secured up to $100 million in funding after reaching an agreement with one of its largest shareholders to settle a months-long dispute over the company’s governance.
Ford (up 1.3 percent) is seeking a new trial after a Georgia jury in August awarded the automaker $1.7 billion in damages over an accident. The auto sector in the S
Nautilus rose by 9.8 percent in the meantime. The Bowflex manufacturer had announced that a possible sale of the company was being considered. This is part of a broader review of strategic alternatives initiated by the company’s board of directors.
Moderna shares are up 2.1 percent. The European Medicines Agency EMA is reviewing the approval of a new Covid vaccine against the omicron subvariants BA.4 and BA.5.
