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MARKET OVERVIEW. The New York Stock Exchange lost what little momentum it had found by the end of the day’s trading, closing slightly lower on Wednesday, boosted in particular by the energy sector.
Fears of weaker demand from rate hikes dragged the Toronto Stock Exchange’s energy sector lower on Wednesday, forcing the trading floor’s benchmark index to close lower as inflation hit a near 40-year high in May.
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Stock market indices at close of trading
In Toronto, the S&P/TSX fell 253.25 points (-1.32%) to 19,004.04 points.
In New York, the S&P500 fell 4.90 points (-0.13%) to 3,759.89 points.
the Nasdaq ended up 16.22 points (-0.15%) at 11,053.08 points.
the DOW fell 47.12 points (-0.15%) to 30,483.13 points.
the loons fell $0.0018 (-0.2333%) to $0.7724.
the oil fell $5.21 (-4.76%) to $104.31.
gold rose $1.10 (+0.06%) to $1,839.90.
the Bitcoin fell $951.46 (-4.56%) to $19,913.12.
“The market was hesitant today,” responded Angelos Kourkafas, Edward Jones, “which is not surprising as the story he tells himself hasn’t changed.”
After opening lower, indices rose throughout the day before running out of steam.
“All things considered, the fact that we ended the day without erasing a significant portion of the gains made yesterday (Tuesday) is a win,” said Art Hogan of National Securities.
Much of the session was taken up by the Federal Reserve Board (Fed) Governor Jerome Powell’s testimony before the Senate Banking Committee.
The official reiterated his determination to fight inflation, saying a recession, largely due to the Fed’s monetary freeze, was “a possibility”.
“We’re not trying to cause a recession, we don’t need it,” argued Jerome Powell. “First and foremost, we believe it is absolutely necessary to restore price stability, which will benefit the labor market.”
“I don’t think Powell said anything new,” Art Hogan said, “and that’s often the case in these congressional hearings. So tomorrow (hearing before a House Committee) it should be the same.”
“The fact that cyclical stocks and the energy sector are all down signals, I think, that investors are concerned about growth given the risks of a recession,” said Angelos Kourkafas.
The construction vehicle specialist is among the cyclical stocks that are above average sensitive to the economy caterpillar (CAT) (-4.35%) or the manufacturer of tractors and mowers John Deere (UK) (-3.44%) both declined.
The energy sector has been undermined by the fall in oil and commodity prices in general. tanker ExxonMobil (XOM) (-3.96%) and Chevron (CVX) (-4.35%), the steelmaker US steel (USSX34.SA)(-2.70%) or the gas group Cheniere (LNG) (-4.44%) experienced the sequence as badly as the mining Freeport McMoRan (FCX) (-7.96%).
On the other hand, the so-called defensive stocks, which are the least sensitive to the economy, like the entire pharmaceutical sector, fought back Merck (MRK) (+1.28%), JOhnson & Johnson (JNJ) (+1.58%) or Moderna (+4.68%).
In this atmosphere of relative risk aversion, many tech stocks have, for once, performed well. Amazon (AMZN) (+0.25%), PayPal (PYPL) (+0.83%) or Netflix (NFLX) (+4.67%), who were in the process of finding a partner to add advertising to their offering, were eliminated from the game.
“These stocks got a boost today as bond yields fell,” said Angelo Kourkafas.
Indeed, the bond market was taken by storm and its interest rates, which move in the opposite direction to prices, fell sharply. The US 10-year Treasury yield fell to 3.15% from 3.27% the previous day.
Elsewhere on the coast the tobacco company Altria (MO) Plunge (-9.19% to $41.50) after the government’s decision, announced on Tuesday, to reduce the nicotine content of cigarettes sold in the United States, which experts say would help curb smoking addiction.
Another blow to the Richmond (Virginia) group, the American agency that specifically regulates the marketing of tobacco and its related products, is preparing a ban on the sale of Juul products, a giant of electronic cigarettes in which Altria owns 35% of the owns capital.
Revlon (REV) continued its wild ride (+34.32% to $8.14). After the cosmetics group collapsed by 73% after the publication of the first information in connection with its bankruptcy filing on Thursday, the cosmetics group decided to increase the value of its stock more than fivefold, spurred in particular by the influx of private investors to speculate about the action.