2023-05-13 11:04:05
The closings of the three main indices on “Wall Street” varied at the end of the week’s sessions, on Friday. The Dow Jones index fell by 1.1%, and the S&P fell 0.3%, while the Nasdaq was the only one among the three major indices that achieved a slight increase of 0.4%.
Wall Street indices closed lower on Friday, affected by fears of the US economy, which led to a decline in US consumer confidence to its lowest level in six months.
Technology stocks also fell in the Standard & Poor’s index, and Apple and Amazon were among the biggest losers, along with Tesla. However, the technology index is still up about 22% so far this year. On Friday, stocks started the session higher, but quickly reversed course after the University of Michigan’s preliminary “disappointing” May reading of the Consumer Sentiment Index hit a six-month low of 57.7, versus the 63 expected by economists polled by Dow Jones. The survey also showed that inflation expectations over the next five years rose to 3.2%, the highest rate since June 2008.
The “Nasdaq Composite” decreased by 0.35%, ending the day at 12,284.74 points, and the “Dow Jones” index lost 0.03%, to settle in the red plate for the fifth day in a row, at 33,300.62 points, recording the longest series of losses for the blue-chip index in two months. While the “S&P” declined by 0.16%, to close at 4,124.08 points.
Over the course of the week, the Dow Jones index fell by 1.1%, and the S&P fell by 0.3%, while the Nasdaq was the only one among the three major indices that achieved a slight increase of 0.4%. Investors are concerned that further Fed rate hikes could push the economy into recession, and they are also closely watching Washington’s moves on debt ceiling crisis negotiations that raise concerns about the economic outlook; CNBC reported that a relevant meeting between President Joe Biden and congressional leaders has been postponed to next week, after it was scheduled for Friday.
The Congressional Budget Office said the United States faced a “significant risk” of defaulting on its obligations in the first two weeks of June if it did not raise its debt ceiling.
Bill Adams, chief economist at Bank of Comerica, said the larger-than-expected drop in consumer sentiment in May is a possible reflection of Americans’ concerns about the debt ceiling debate that threatens the “essential building block” of the US financial system.
- regional banks
In the world of regional banks, “Bac West” shares fell by 2.9% after the bank announced a sharp decline in deposits last week. BNC lost nearly 1%, and Zionis closed down 1.1% as well.
Meanwhile, Thursday’s “weaker-than-expected” wholesale price data failed to shield investors from persistent deflationary fears, especially as a handful of stocks continued to move the market.
On Friday, the Bureau of Labor Statistics said that import prices jumped 0.4% month-on-month in April, marking the first rise so far in 2023. Economists had expected a 0.3% rise last month, compared to a 0.8% decline for the previous month.
Bank of America remains optimistic about Krispy Kreme stock, especially after the company’s earnings report, which exceeded Wall Street’s expectations in the first quarter. On Thursday, the donut maker reported earnings of 9 cents per share on revenue of $419 million, and the company reaffirmed its outlook for full-year financial performance. Bank of America believes that gold, despite its weekly decline, represents a good hedge for long-term investors. In this regard, Savita Subramanian, Head of US Equities and Quantitative Strategy at the Bank, said: “After a decade of quantitative easing, during which bonds, alternatives and stocks drifted higher, the precious metal continues to provide consistent diversification advantages and plays an important role in investors’ effective portfolios.”
Subramanian noted that gold was outperforming after “incomplete” interest rate hike cycles by the Fed, and that geopolitical tensions and sanctions could stimulate investor interest in the hedging capabilities of psychological metals.
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