Is a recession threatening the USA? The weakest semester in decades
The risk of a further rise in interest rates and the resulting recession continues to dominate US stock markets.
Investors in stocks have had to go through a lot in the last few months. Inflation և Concerns about the economy caused US stock exchanges to collapse in the first half of the year, as they had not done for decades.
It fell further on Thursday, even though significant early trade losses were further curbed. This could not change much in the terribly weak half-yearly balance. The S&P 500 was the weakest development in the entire market since 1970. The Nasdaq 100 Technology Choice Index was its worst indicator since 2002.
At the end of trading, the leading Dow Jones Industrial Average was down 0.82% at 30,775.43 points. The S&P 500 reduced its loss to 0.88 percent from 3785.38 points, while the Nasdaq 100 finally fell 1.33 percent to 11,503.72 points. For the first half of the year, the three barometers of the stock market registered significant discounts of 15, 21 և 30%.
The risk of a further rise in interest rates and the resulting recession continues to dominate US stock markets. Market traders said on Wednesday that US Federal Reserve Chairman Jerome Powell and his eurozone counterparts had warned at a forum in the UK that inflation would be prolonged. This sparked the debate that “continuing to raise interest rates to fight inflation will eventually lead to a recession,” wrote market strategist Jim Reed of Deutsche Bank.
When prices rise, consumers try to curb costs. This is confirmed by the less sharp increase in US consumer spending in May than expected. In addition, according to revised data, last month’s spending grew more slowly than previously known.
Shares of carmakers such as Ford, General Motors (GM) and Stellantis were felt at a two-and-a-half to five-percent rate. As a relatively expensive consumer product, cars are often the first to go off the list of private purchases. In addition, as capital market interest rates rise, financing for purchases becomes more expensive, especially for corporate clients.
Shares of the Walgreens Boots Alliance pharmacy chain fell more than 7%, making them the biggest loss for the Dow. Analyst Lisa Gill from JPMorgan Bank spoke about lower-than-expected profitability in the third quarter.
Corona Beer Constellation Brands beer papers lost almost four and a half percent. The trader justified the losses with a cautious forecast for the second working quarter.
Biontech և Pfizer, on the other hand, are among the daily winners with about five և almost three percent bonuses, respectively. The US government is ordering large-scale coronavirus vaccines from both companies for a planned boost in the fall. According to Pfizer CEO Albert Burla, these are agents designed to protect against new versions of the virus, such as Omicron.
The euro became positive with reduced losses on US stock exchanges, last trading at 1.0483 US dollars in New York. The European Central Bank previously set the base rate at $ 1.0387.
US government bonds, which are considered a particularly safe investment, won the dislike of investors’ continued risk. while the ten-year Treasury futures contract (T-Note futures) increased by 0.59% to 118.20 points, and the yield on ten-year paper. dropped to 99 2.99%, below the 3% mark for the first time in almost three weeks.