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Wall Street closes lower, all three major indices at year-end lows

The New York Stock Exchange closed lower on Friday, with all three major Wall Street indexes at their year-end lows, a gloomy conclusion to a September marred by fears of a recession triggered by currency tightening. .

The Dow Jones fell 1.70% and closed at its lowest level at the close of the session since the beginning of November 2020, at 28,725.51 points. The Nasdaq index lost 1.51% to its lowest close since July 2020 at 10,575.61 points, and the broader S&P 500 index fell 1.48% to 3,585.62 points.

“September is usually bad for stocks,” said DailyFX’s Christopher Vecchio.

“Since mid-August, the movement has been one-way, downward, with the exception of a bounce coming from a Fed (US central bank) reversal hope,” which quickly spilled over, recalled Oanda’s Edward Moya.

The frigid temperature that had already reigned in the markets for several weeks fell even further on Friday with the publication of the PCE price index, the most followed by the Fed.

It surged 0.3% for a month in August, more than the 0.2% expected by analysts. In one year, inflation reached 6.2%, that is, higher than the forecast 6.0%, but lower than the previous month (6.4%).

“This report echoed the IPC index,” another major price index released in mid-September, “and reinforces the Fed’s aggressive stance,” estimated Sam Millette of Commonwealth Financial Network.

Bond yields rose slightly, one more reason to justify investors’ anxiety, who have seen them rise inexorably for several weeks.

The 10-year US government bond yield stood at 3.81%, compared to 3.78% the day before.

However, investors noted that consumer inflation expectations surveyed by the University of Michigan for its monthly report showed a slowdown.

They now expect annual inflation to be 2.7% 5-10 years from now, the lowest since April 2021. Matthew Martin of Oxford Economics also noted in this survey that “consumer pessimism (remained) in historical level” in terms of the trajectory. of economic activity in the medium term.

Investors also noted the increase in consumption in the United States, of 0.4% gross in August in one month and even 0.1% corrected for inflation, the latter indicator in line with expectations.

To the gloomy environment and to the indicators of the day was added “the additional noise” generated by the transactions carried out for the last day of the month and of the quarter, explained Tom Hainlin, of US Bank Wealth Management.

Many managers and institutional investors made portfolio adjustments, mostly unfavorable to equities.

“The problem for the market today is that the Fed doesn’t seem ready to stop anytime soon, but all these other risks have come to light,” said Christopher Vecchio, referring to the bank’s intervention. from England on Wednesday to try to stabilize the British bond market.

Therefore, “people will probably feel uncomfortable about having risky or long-term assets in the near future,” according to the analyst.

Tech stocks suffered another downpour, led by Apple (-3.00% to $138.20), which has just lost almost 9% in three sessions, weighed down by the downward revision of its iPhone sales forecasts in the second semester.

Sporting goods manufacturer Nike suffered (-12.81% to 83.12 dollars) despite the publication, on Thursday after the stock market, of a turnover and a quarterly net profit above expectations. Among the disadvantages, the weak demand in China and the very high level of stocks, which force the comma brand to grant discounts.

Memory card maker Micron fell among the declines (+0.18% to $50.10) after reporting a higher-than-expected net profit for the quarter ending in early September. However, the group’s forecast for its current quarter fell well short of analyst projections, with Micron citing a slowdown in demand and a “down cycle” for the sector.

The tobacco company Altria coughed (-1.92% to 40.38 dollars) after noting that it was renouncing the non-competition clause agreed with the electronic cigarette specialist Juul, in which it owns 35% of the capital.

Cruise line Carnival Corporation sank (-23.25% to $7.03), weighed down by much lower-than-expected turnover and a much larger-than-expected loss, after its costs exploded. However, the group indicated that reserves for 2023 were at a level above the historical average.

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