Stock Market: Wall Street closed sharply lower, fears the Fed has a very heavy hand

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market reviews. The New York Stock Exchange ended sharply lower on Thursday, frightened by the possibility that the forced rally of central banks, led by the Federal Reserve, will take a breather from an economy that is already showing signs of weakness.

The Toronto Stock Exchange fell more than 600 points on Thursday, while major US indexes also fell the day after the largest rate hike by the US Federal Reserve since 1994.

To re-consult market news

Stock market indices at close

in Toronto, a S&P / TSX It fell 607.50 points (-3.10%) to 19,004.06 points.

in New York, a S & P500 It fell 123.22 points (-3.25%) to 3666.77 points.

The Nasdaq It decreased 453.06 points (-4.08%) to 10,646.10 points.

The daw It decreased 741.46 points (-2.42%) to 29,927.07 points.

The almost It closed down $0.0036 (-0.4673%) at $0.7724.

The oil It rose $1.77 (+1.53%) to $117.08.

He went It rose by $38.40 (+2.11%) to $1,858.00.

The Bitcoin It ended trading down $1,154.01 (-5.29%) at $20,670.55.

Context

“It didn’t take long for Wall Street to lose steam since yesterday after (Fed announcements), as other major central banks also got fiercer in their fight against inflation,” Oanda’s Edward Moya explained. .

After the Federal Reserve on Wednesday, the Bank of England also raised its key interest rate on Thursday, but by only 0.25 points, as did the Swiss National Bank, the latter of which completely surprised investors.

explained Maris Ogg, portfolio manager for Tower Bridge Advisors.

“With the Fed’s balance sheet cut (which started in June) and markets anticipating an additional 0.75 percentage point hike at the upcoming Fed meeting,” traders are wondering “if the Fed won’t get lost,” and to advance too fast and too strong in the Monetary policy tightening, commented Quincy Crosby, of LPL Financial.

The surrounding gloom was supported by a series of weak indicators, led by the index of manufacturing activity in the Philadelphia region, which showed a contraction in June (-3.3 points), while economists expected an advance (+4.8 points).

Another cloud that casts a shadow over the US economy’s horizon is the gradual rise in unemployment, as evidenced by the weekly records that exceeded expectations (229,000). For Peter Bokfar, of Bleakley Consulting Group, “The increase in layoffs is watching us, and the question is what will be the pace.”

The last negative sign was the decline in the initial housing stock in the US, which came at a lower level than expected.

The first signs of a slowdown are beginning to appear, “so the question is whether this will affect the pace of inflation,” according to Maris Aug. “Because the Fed is focused on that” more than on economic growth. “And if not, it looks like they won’t stop (in raising interest rates) despite signs of declining consumer confidence” in the economy.

For Maris Ogg, the ongoing global monetary tightening, as well as the exit of some investors out of the market who wish to limit their exposure to risk, is threatening market liquidity, which could increase volatility, or even create more brutal shocks.

Case in point, the 10-year US government bond yield fluctuated by 0.26 percentage point on Thursday, a very unusual volume in a market with usually very calculated moves. It settled at 3.23% versus 3.39% the day before.

On the stock side, tech giants led the decline, from Meta (FB) (-0.01%) in Apple (AAPL) (-3.97%) via Microsoft (MSFT) (-2.70%) and Alphabet (GOOG) (-3.40%).

Twitter (TWTR) It also finished in red (-1.66% to $37.36), far from the takeover price suggested by Elon Musk ($54.20), who was vague about his plans for the platform during a staff meeting on Thursday.

for TeslaHeaded by the billionaire businessman, it was leaked (-8.54% to $639.30), swayed by the announcement of price increases for its models, but also by concerns that the Twitter profile could be a distraction.

Among the few that will be floated are the so-called mainly defensive stocks, that is, less sensitive to the economic situation, such as Walmart (WMT) (+ 1.04%), Johnson & Johnson (JNJ) (+ 0.05%) or Procter and Gamble (PG) (+0.61%).

cosmetic set Revlon (Rev) It was undermined (-13.33% to $1.95) after its bankruptcy filing on Wednesday, which should allow it to be restructured. The company has had a hard time with the pandemic, which has slowed spending on some beauty products.



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