2023-10-16 06:26:00
(CercleFinance.com) – Wall Street ends the week with a contained decline which contrasts sharply with the ‘VIX’ which jumped +15.6% and finished beyond the threshold of 19 (at 19.3, close from the zenith of 19.8 on October 3).
The Dow Jones in particular managed to close in the green (+0.1%) and thus achieved a 4th positive session out of 5, for a weekly score of +0.6% which contrasts sharply with the -1.2% of the Nasdaq ( which falls into the red over the past week).
The ‘techno’ fell in the wake of Match Group (-4.9%), NXP (-3.9%), Microchip (-3.8%), ASML (-3.7%), Applied Materials (-3 .6%)…the Philadelphia Semiconductor Index fell -2.7%).
The S&P500 dropped 0.55% but still ended with a weekly gain of +0.4%.
The easing of long-term rates contributed to making sellers hesitate (they hedged massively as demonstrated by the ‘VIX’ and refrained from reducing their portfolios).
The US bond markets erased the losses of the day before (post-American CPI and poorly received FED auction) with an easing of -8.5 points (towards 4.625%) which does not really reflect a shift to ‘risk-off’ , which would be understandable given the geopolitical context and the risk of conflagration in the Middle East (beyond the perimeter of Israel, Palestine, Gaza, Jordan).
Iran – which exports 3.5 million barrels per day – has frequently been the target of numerous threatening statements from American officials in recent days, due to Tehran’s support for the two terrorist organizations hostile to Israel (Hezbollah and Hamas).
Enough to partly explain the sudden rise in oil, with ‘WTI’ soaring +5.7% to $87.6 (i.e. +6% over the week), with precautionary purchases on the eve of ‘an anticipated weekend ‘to the sound of cannon’.
Jamie Dimon, CEO of JP-Morgan, declared that the geopolitical situation (Ukraine, Israel, China, etc.) is ‘the most dangerous the world has seen in decades’.
The macroeconomic news was not reassuring this Friday either: American consumer confidence deteriorated significantly in October, according to the monthly survey from the University of Michigan (UMich) which publishes an index in drop of -5Pts to 63 in preliminary estimate, once morest 68.1 in September.
This stronger-than-expected decline reflects a deterioration in both the current economic conditions sub-index, to 66.7 (compared to 71.4), and that of consumer expectations, to 60.7 (compared to 66).
Another closely watched figure, the Department of Labor announces that import prices in the United States increased by 0.1% in September.
A reassuring figure following the jump of +0.6% in August… for their part, export prices increased by 0.7% last month, following having climbed by 1.1% the previous month.
Overall, over the last 12 months, American import prices showed a fall of 1.7% in raw data (-0.8% excluding petroleum products), and those for exports contracted by 4.1 % (-3.8% excluding agricultural products) in September.
Although relegated to the background given geopolitical news, the quarterly ball began on October 13 in the United States with the publication of ‘better than expected’ results from Wells Fargo (+3%), a major specialist in real estate credit, a sector currently in crisis… but the rise in rates has boosted margins: net profit stands at $5.767 billion, or $1.48/share, up almost 60% compared to Q3 2022).
Citigroup (-0.2%), on the other hand, saw its profit stagnate (symbolic increase of +2%) and the results were only positive thanks to the +12% increase in profits of its ‘Institutional Clients Group’ division ( market activities + investment banking).
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