(CercleFinance.com) – US equity markets fell once more on Friday, as investors began to worry regarding valuations sometimes seen as high. The Dow Jones dropped nearly 0.9% to 33,707 points, while the Nasdaq Composite fell 2% to 12,705 points.
For the past week as a whole, the Dow fell only 0.2%, but the Nasdaq lost regarding 2.6% – its worst week since early July – ending a series of five consecutive weeks of increases.
In the absence of catalysts, traders hunkered down and took some profits. For UBS, it was the optimism that had hitherto surrounded the possibility of more measured action by central banks that was starting to run out of steam.
‘At least three consecutive months of slowing inflation are needed for a pause to be considered’, judged the Swiss bank which expects rate hikes of 100 bp by the Fed by the end of the year , or even more if inflation does not slow down.
Wells Fargo also pointed to ‘hawkish’ comments from several regional monetary policy officials, such as St. Louis Fed President James Bullard, who ‘reaffirmed the central bank’s commitment to continue raise rates.
On the stock side, GM advanced 2.5% following announcing the reinstatement of a quarterly cash dividend – suspended in April 2020, in response to uncertainty caused by the global coronavirus pandemic.
Foot Locker soared 20% following news of Mary Dillon’s appointment as the sporting goods chain’s new CEO and better-than-expected quarterly releases overshadowed poor prospects.
Deere finally gleaned 0.4% despite the publication by the agricultural equipment supplier of a weaker than expected increase in its quarterly profit and a lowering of its annual profit forecast.
HP fell 2.8%, penalized by a lowering of Wells Fargo’s advice to ‘underweight’ with a price target reduced to 30 dollars, the broker worried regarding the expected drop in demand for PCs .
(c) 2022 CercleFinance.com. All rights reserved.
