Current figures from the US job market are depressing the mood on Wall Street. As a result, investors fear continued high inflation rates. Online giant Amazon, meanwhile, is making headlines with the biggest wave of layoffs in its history.
A continued robust US labor market has increased investors’ fears of a further aggressive monetary policy course by the Fed. The stock market reacted with significant losses. The technology selection index Nasdaq 100 slipped 1.59 percent to 10,741.22 points. The leading index Dow Jones Industrial lost 1.02 percent to 32,930.08 points and for the market-wide S
According to the private service provider ADP, 235,000 jobs were created in the US private sector in December. Analysts had only expected 150,000 new jobs. A robust job market can mean rising wages and, as a result, continued high inflation. This could prompt the US Federal Reserve to raise interest rates more than previously expected. The official US employment market report for December, which will be published on Friday, is decisive for the Fed.
The day before, the published minutes of the Fed interest rate meeting in December showed that the monetary watchdogs want to continue to fight inflation with determination. “The general consensus is that interest rates should remain elevated longer than some expected,” commented analyst Ricardo Evangelista of broker Activtrades.
Walgreens Boots Alliance shares in the Dow fell to their lowest level since late October. The titles of the drugstore and pharmacy chain did not benefit from an increase in this year’s sales outlook. Rather, investors were disappointed that Walgreens only confirmed the profit outlook. As the weakest value in the leading index, the titles lost 6.1 percent at the end of trading.
The shares of the bank Silvergate Capital, which specializes in fintechs and cryptocurrencies, fell by almost half at times to close with a minus of almost 43 percent. According to the Californians, the crypto market crash triggered such a run on the bank’s deposits that it prompted Silvergate to divest assets at huge losses and lay off 40 percent of its workforce. The negative industry news also affected the shares of the crypto exchange Coinbase with a drop of a good eleven percent.
Bed Bath saw a price slide of almost 30 percent
With a price increase of 6.6 percent, the papers from Western Digital made a positive impression. As the Bloomberg news agency reported, citing circles, the memory manufacturer is again in talks about a merger with Japanese competitor Kioxia. However, it was also said that the negotiations are still at an early stage and could end without an agreement. T-Mobile US stocks gained 3.2 percent. The Telekom subsidiary surprisingly increased the number of its contract customers in the fourth quarter. As expected, the number of new customers is strong, wrote UBS analyst John Hodulik. The churn rate was the lowest it had ever been in a fourth quarter.
The euro also came under pressure from the robust US labor market data. After the Wall Street close, the shared currency traded at $1.0517. The European Central Bank (ECB) had set the reference rate at 1.0601 (Wednesday: 1.0599) dollars, the dollar thus cost 0.9433 (0.9435) euros. On the bond market, the futures contract for ten-year bonds (T-Note Future) fell by 0.11 percent to 113.06 points. The yield on ten-year government bonds was 3.71 percent.
