The New York Stock Exchange ended down once more on Monday, still bothered by the inexorable rise in interest rates and its consequences for the economy, with no element of support on the horizon.
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The Dow Jones lost 1.11% and hit a new low for the year to close at 29,260.81 points. The star index of the New York place, which remains on five negative sessions in a row, had not finished at this level since November 2020.
Another symbolic threshold, the Dow Jones has officially entered the “bear market”, which means that it has lost more than 20% since its historic peak in early January.
The broader S&P 500 index also posted its worst performance of the year at the close. You even have to go back to December 2020 to find worse.
The Nasdaq index dropped 0.60%.
“Investors are reacting to a toxic mix of bad news that has been further deteriorated by what happened in the UK on Friday,” explained Andy Kapyrin, of Regent Atlantic, in reference to the stimulus measures presented by the new government. British which caused the pound sterling to implode.
“I don’t know if we’ve hit rock bottom, but for investors, it makes sense to get back in the water,” argued the analyst, pointing to broken stock prices and very high bond rates.
Wall Street was also driven by a bargain hunt, which on Monday benefited a few companies that have been particularly heckled in recent weeks, such as Apple (+0.23%), Amazon (+1.20%), Costco (+ 2.98%) or 3M (+0.01%).
But, overall, “Wall Street realizes that we will not receive a convincing signal of a slowdown in inflation within two months,” said Edward Moya of Oanda. “This should prevent getting back into buying quickly.”
Already at high levels, bond rates did not slow down on Monday, much to the dismay of investors. The yield on 10-year US government bonds once once more approached the symbolic threshold of 4%, at 3.92%, for the first time in more than 12 years.
For Andy Kapyrin, the “key” is the stabilization of bond rates, “because this will allow all the other financial markets to start behaving normally once more”.
According to him, they might be oriented by the few indicators to come this week, in particular the durable goods orders on Tuesday or the consumer confidence index from the University of Michigan on Friday.
The PCE price index is also expected on Friday, but relating to August, it is a late indicator that is not likely to change the trajectory of the monetary policy of the American central bank (Fed).
Sign of the nervousness, the VIX index, which measures market volatility, climbed Monday to its highest level since mid-June.
On the side, Las Vegas Sands (+11.81%) and Wynn Resorts (+11.99%) picked up big following the announcement, on Saturday, by the Macau authorities, that group travel from mainland China would be once more authorized to enter the territory. The news will benefit the casinos managed in Macau by the Asian subsidiaries of these two groups.
Lyft (-3.36% to 13.52 dollars) was handicapped by the lowering of a UBS analyst’s recommendation. He mentions a survey of drivers, a majority of whom say they prefer Uber to its main competitor.
