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NEW YORK (Dow Jones) — Weak US consumer confidence sent Wall Street on Tuesday sharply. In June, the index slipped to its lowest level since February 2021. The sub-indices for assessing the current situation and for expectations also fell. This increased fears that the US Federal Reserve would take a harsher stance in the coming interest rate hikes and a possible recession. As a result, the initial strong gains triggered by the decision to relax the corona virus in China could not be maintained.
The Dow Jones index lost 1.6 percent to 30,947 points after hitting a daily high of 31,885 points. The S&P 500 fell 2.0 percent and the Nasdaq Composite fell 3.0 percent. There were 1,022 (Monday: 1,785) price winners and 2,229 (1,496) losers. 125 (122) titles closed unchanged.
Investors continued to fluctuate between fears of inflation and fears of a recession, it said. As a result, concerns continued to revolve around how aggressively the US Federal Reserve will raise interest rates given the threat to the economy. In addition, there were increased adjustments to positions at the end of the quarter.
According to the President of the New York Fed, John Williams, growth in the US economy will slow down. This is necessary to cool down inflation. However, he assumes that a recession can be prevented, he said in an interview with CNBC. Williams added that the next Fed meeting will discuss whether to raise interest rates by 50 or 75 basis points.
“The question is when will we bottom out and when will the tipping point come, and it’s not necessarily instantaneous,” said Eloise Goulder, director of global markets equities trading at JPMorgan Chase. “For me to be optimistic for the second half of the year, we need to see that inflation has peaked and the data is stabilizing,” she adds.
Nike by numbers lighter
Sporting goods manufacturer Nike beat expectations in the fourth fiscal quarter despite a decline in sales and earnings. The company also announced an $18 billion share buyback and provided an optimistic outlook. The price nevertheless fell by 7.0 percent. In retail, reference was made to increased inventories and bottlenecks in the supply chain.
US bank shares fared better than the market as a whole. Morgan Stanley shares gained 0.9 percent. Goldman Sachs and Wells Fargo fell just 0.4 and 0.1 percent, respectively. After the institutes have passed the US Federal Reserve’s annual stress test, the dividends will be increased. Goldman Sachs and Wells Fargo each want to increase this by 20 percent, while Morgan Stanley wants 11 percent. Morgan Stanley also announced a share buyback program of up to $20 billion.
JP Morgan Chase & Co plans to leave its third-quarter dividend at $1 per share as the bank needs to allocate more capital to complete its annual stress test. The titles lost 0.5 percent.
Spirit Airlines shares rose 1.1 percent. JetBlue Airways (-0.3%) has increased the bid for the airline. Only the day before, the company had decided to accept the takeover offer from Frontier Group Holdings. Spirit shareholders are scheduled to vote on the bids at an extraordinary general meeting on Thursday.
Dollar bounces – oil prices continue to rise
The dollar recovered from recent losses, with the dollar index gaining 0.6 percent. The euro, on the other hand, fell more clearly below the $1.06 mark. Commerzbank analyst You-Na Park-Heger said it would be difficult for the euro to continue gaining given the worries that the global economy could weaken. In addition, the risk of an energy crisis remains.
Oil prices rose to their highest level since mid-June, gaining as much as 2.4 percent. The decision to relax China has fueled speculation about higher demand for commodities, it said. In addition, there were doubts about the ability of Saudi Arabia and the United Arab Emirates to significantly increase their production. In addition, the G7 continues to consider how Russian oil and gas production can be curbed.
Bonds have stabilized after the recent sharp sell-off. The ten-year return fell by 1.6 basis points to 3.19 percent.
The price of gold fell to its lowest level in about two weeks. Concerns that the US Federal Reserve would raise interest rates more than previously expected to curb inflation were said to be putting pressure on the interest-free precious metal.
INDEX last +/-% absolute +/-% YTD
DJIA 30.946,99 -1,6% -491,27 -14,8%
S&P-500 3,821.55 -2.0% -78.56 -19.8%
Nasdaq-Comp. 11.181,54 -3,0% -343,01 -28,5%
Nasdaq-100 11,637.77 -3.1% -370.47 -28.7%
Term Yield Bp to VT Yield VT +/-Bp YTD
2 years 3.13 +1.1 3.12 240.0
5 years 3.25 +0.1 3.25 199.2
7 years 3.26 -1.5 3.28 182.2
10 years 3.19 -1.6 3.21 168.2
30 years 3.29 -2.4 3.32 139.3
FOREX last +/- % Tue, 8:18 Mon, 18:40 % YTD
EUR/USD 1,0527 -0,5% 1,0580 1,0597 -7,4%
EUR/JPY 143.37 -0.0% 143.37 143.40 +9.5%
EUR/CHF 1.0076 -0.4% 1.0114 1.0126 -2.9%
EUR/GBP 0,8636 +0,1% 0,8623 0,8626 +2,8%
USD/JPY 136,20 +0,5% 135,52 135,32 +18,3%
GBP/USD 1,2190 -0,6% 1,2271 1,2284 -9,9%
USD/CNH (Offshore) 6,7026 +0,2% 6,6859 6,6895 +5,5%
BTC/USD 20.233,46 -2,6% 20.820,08 20.746,62 -56,2%
ROHL last VT-Settl. +/- % +/- USD % YTD
WTI/Nymex 111,72 109,57 +2,0% 2,15 +54,8%
Brent/ICE 117,81 115,09 +2,4% 2,72 +56,2%
GAS VT close +/- EUR
Dutch TTF 130,10 129,69 +0,5% 0,64 +52,0%
METALS last day before +/- % +/- USD % YTD
Gold (Spot) 1.819,71 1.822,60 -0,2% -2,89 -0,5%
Silver (Spot) 20.82 21.17 -1.7% -0.35 -10.7%
Platinum (Spot) 912.00 911.55 +0.0% +0.45 -6.0%
Kupfer-Future 3,75 3,76 -0,4% -0,02 -15,7%
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(END) Dow Jones Newswires
June 28, 2022 16:17 ET (20:17 GMT)
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