Wall Street loses once more
Interest rate concerns are driving investors out of stocks
08/22/2022, 10:35 p.m
Concerns regarding inflation and growth weighed on the US stock markets at the start of the week. Before the international meeting of central bankers in Wyoming, which begins on Thursday, prices are going down once more. The shares of cinema operators even collapse.
The losing streak on Wall Street continued at the beginning of the new week. Of the Dow-Jonesindex lost 1.9 percent. Of the S&P-500 fell by 2.1 percent and the technology-heavy ones that are considered particularly sensitive to interest rates Nasdaq-Indices up to 2.7 percent.
Market participants pointed to a number of factors weighing on sentiment, primarily geopolitical, but also market technicals and seasonal patterns in the stock market, following some indices rose more than 19 percent from their mid-July lows. The interim rally was triggered by speculation that the peak of inflation might have been seen in the USA and that the US central bankers might therefore shift down a gear in their interest rate hike process.
Recently, however, other signals have come from circles of US central bankers, namely that everything must continue to be done to curb inflation. At the annual meeting of central bankers in Jackson Hole, which begins later in the week, little is likely to change in this hawkish attitude, according to the disillusioned market.
Dollar rises, euro falls
In line with this environment, ten-year US market interest rates have now broken through the three percent mark once more following a setback. Of the Dollar continued to rise with higher interest rates Euro fell well below parity once more.
In the meantime, it was rather worrying for many actors that in China, which is so important for the global economy, key interest rates were reduced once more within a week to support the weakened economy. And because the price of gas in Europe has climbed to new highs, the danger of a recession is increasing there in the coming months. Because gas demand is also shifting to the USA, gas is now as expensive there as it was last in 2008. In late trading, the price rose by a good 4 percent.
On the oil price was initially weighed down by the fear of lower demand due to the economy. Observers also pointed to a possible agreement in the nuclear dispute with Iran, which might lead to a larger supply if more Iranian oil came onto the market once more. However, prices broke sharply from their daily lows following Saudi Arabia threatened to cut OPEC production to stem the price slide. The European reference variety Brent even turned positive at settlement.
AMC Entertainment sags
All in all, the participants in this mixed situation on the stock market once more acted risk-averse and frolicked more and more on the seller side. The online retailer Amazon is apparently one of the bidders at an auction for the healthcare company Signify Health. Amazon joins other bidders competing for the home health services provider, according to people familiar with the matter. The action might bring in more than 8 billion dollars. Signify Health jumped 32 percent. Next to Amazon (minus 3.6 percent) also belongs CVS Health (minus 1.6 percent) to the bidders, as well UnitedHealth (down 0.7 percent).
AMC Entertainment fell by 42 percent. Behind this was, on the one hand, that the cinema operator also traded preferred shares for the first time on Monday, and on the other hand that the competitor Cineworld (down 21.4 percent in London) may file for bankruptcy due to struggling business in the US.
The also as so-called meme stock applicable Bed, Bath & Beyond became cheaper by a further 16.2 percent. On Friday it fell by 40 percent following the major shareholder RC Ventures withdrew completely from the interior designer. Ford lost 5 percent. According to a court ruling, the car manufacturer Ford is threatened with damages of 1.7 billion dollars. Biontech showed 0.3 percent higher following the company shared with Pfizer (minus 0.5 percent) had applied for US approval for a vaccine adapted to the omicron variant of the coronavirus.
