MARKET OVERVIEW. The New York Stock Exchange suffered its third consecutive loss on Tuesday amid concerns that continued strength in the US jobs market will prompt the Fed to hike interest rates more severely.
Consult market news (again).
Stock market indices at close of trading
In Toronto, the S&P/TSX closed 323.22 points (-1.63%) at 19,512.90 points.
In New York, the S&P500 fell 44.45 points (-1.10%) to 3,986.16 points.
the Nasdaq fell 134.53 points (-1.12%) to 11,883.14 points.
the DOW declined 308.12 points (-0.96%) to 31,790.87 points.
the loons declined by $0.0050 (-0.6508%) to hit $0.7638.
the oil declined $4.82 (-4.97%) to $92.19.
gold fell $14.30 (-0.82%) to $1,735.40.
the Bitcoin fell from $201.32 (-1.00%) to $19,962.61.
While the indices had started in the green, according to Briefing’s Patrick O’Hare, initially guided by “investors’ desire to take advantage of this decline to buy back at a lower price”, the recovery was short-lived. .
The Consumer Confidence Index calculated by the Conference Board showed for the first time that consumer sentiment in the United States began to rise in August after three months of decline.
This “could help support spending,” Lynn Franco, senior director of economic indicators at the Conference Board, said in a statement. Which wouldn’t help bring prices down. And Lynn Franco emphasized that “inflation and further interest rate hikes always pose risks to economic growth in the short term”.
Then figures from the US Department of Labor (JOLTS survey) showed that the number of job vacancies in the United States remained at a very high level of 11.2 million.
A sign that the labor market remains very tight and employers will probably have to offer higher salaries to attract applicants.
“We understand why investors are concerned about what remains a very tight job market. This generally leads to wage increases,” Jack Albin de Cresset told AFP.
“Investors are starting to worry about inflation,” he added, noting that government bond yields were still rising on the bond markets side. The interest rate on 10-year bills was 3.10% and that on two-year bills rose to 3.45%, the highest in 15 years.
“A lot of the bond market is seeing yields rising and that’s putting pressure on stocks,” concluded Jack Albin.
To a long fight against inflation
Added to this data were several comments from US Federal Reserve (Fed) officials pointing to a long fight against inflation.
It will take “a few years” for inflation in the United States to return to the Federal Reserve’s target of 2%, the New York Fed’s John Williams warned on Tuesday, stressing that overnight interest rates will be raised further to curb the rise in prices .
“The situation is very difficult. Inflation is very high. The economy encounters many obstacles. I think it will take a few years but we will get there,” he added.
Investors are awaiting the official August payrolls report on Friday after an unexpected rise of half a million new hires in July. Analysts expect 300,000 new jobs and a stable and still historically low unemployment rate of 3.5%.
On the stock side, the energy sector (-3.36%) led the decline, reflecting recession fears that were driving the oil market. The barrel of Brent ended down 5.50% below the $100 mark. ExxonMobil (XOM) fell 3.81%, Chevron (CVX) 2.44%.
The chain of electronics stores Best Buy (BBY) up 1.61%, albeit mixed after the quarterly results were released, but better than expected and especially above those of the same period of 2019, before the pandemic.
Among the other values of the day, Twitter (TWTR) fell 1.80% to $39.32 as Elon Musk cited allegations from the company’s former security chief Peiter Zatko in a new letter to provide additional arguments to justify abandoning the acquisition project.
The highly volatile and speculative stocks of the last few weeks Bed Bath And Beyond (BBBY)another chain of stores, lost 9.29% after soaring on the eve of a presentation of the group’s strategy by management.
Snap (SNAP), the parent company of popular messaging app Snapchat, fell 2.53% to $10.01. The company, which announced heavy second-quarter losses in late July, is preparing to lay off 20% of its workforce, according to specialist website The Verge. The stock has lost nearly 80% in the stock market this year.