Wall Street in Red | Finansavisen

Wall Street in Red | Finansavisen
Wall Street in Red | Finansavisen

Futures indicated that it could move towards a weakly positive start on the New York Stock Exchange, but all opened in the red.

After just over three hours of trading, the exchanges look like this:

  • The industrial index Dow Jones is down 0.2 percent to 30,129.64.
  • The broad S&P 500 index fell 0.6 percent to 3,766.40 (lowest since mid-July).
  • The technology index Nasdaq returns 1.3 percent to 11,078.27.

The 10-year-old strongly up

The ten-year US government bond yield has shot up during the day, up to over 3.70 percent. This corresponds to an increase of 17 basis points today alone.

Wednesday’s third consecutive triple hike by the Federal Reserve has raised fears that the US central bank will trigger a recession in its battle to bring down skyrocketing inflation.

30-year mortgage interest rate average per 15 September 6.29 per cent, according to Marketwatch Freddie Mac’s weekly survey on Thursday. The average has not been higher since 2008. The rise from the previous week is 27 basis points.

– Shoot first, ask questions later

Growth-oriented shares and the semiconductor sector weigh on, as do industry and income-dependent consumption.

– The markets feel they have to recalibrate valuations, and when that happens, it happens in a linear fashion – shoot first and ask later, says chief strategist Art Hogan at B. Riley Wealth to CNBC.

The heaviest Dow components are American Express at minus 4 percent, while Boeing, Goldman Sachs and Walt Disney are down 2-3 percent.

Tesla is back over 3 percent, while Apple and Amazon are down over a percent.

– The Fed tolerates a recession

As expected, the US central bank, the Federal Reserve, raised the key interest rate on Wednesday evening by 75 basis points. The three indices all ended down around 1.6 percent.

The Fed gave its clearest signal to date that it is willing to tolerate a recession if necessary to get inflation under control, writes TDN Direkt.

– The Fed is planning a hard landing, a soft landing is almost impossible. Powell’s admission that economic growth will be lower than the trend for a period should be translated into the central bank advocating a recession. Times will be tougher from here on out, says chief strategist at Principal Global Investors, Seeema Shah, according to Bloomberg.

At the same time, two pieces of good news have arrived this Thursday. The US had a current account balance of minus $251.1 billion in the second quarter, less than expected, and fewer than expected applied for unemployment benefits last week.

The article is in Norwegian

Tags: Wall Street Red Finansavisen

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