U.S. stocks mixed with the index on Friday afternoon amid sharp declines in blue-chip component Nike Inc., on the heels of two strong sessions for the broader equity market that recovered most of the week’s losses.
How is the stock benchmark trading?
Dow Jones Industrial Average DJIA
An increase of about 14 points or less than 0.1% to about 34,780.
S&P 500 SPX
It rose 2 points, or about 0.1%, to 4,451
Nasdaq Composite Index COMP
Fell 31 points, or 0.2%, to 15,021.
On Thursday, the Dow rose 507 points, or 1.48%, to 34,765, its biggest two-day point and percentage increase since March 8, 2021. The S&P 500 rose 53 points, or 1.21%, to 4449, and the Nasdaq Composite rose 155 points, or 1.04%, to 15052.
What is driving the market?
U.S. stock indexes were racing between gains and losses on Friday afternoon, possibly ending the rally after the Federal Reserve’s policy meeting this week, as markets came under pressure amid concerns about China, Kovid-1 and U.S. politics.
According to Matt Perron, stocks have been weighed down by a long list of concerns over the federal debt debt ceiling in the United States and the debt problem of property giant China Evergrand Group, ranging from disrupting global supply-chain to epidemics, according to Janus Henderson, research director. He said in a phone interview on Friday that “the market has been under some pressure for the past few weeks,” describing the consolidation as “healthy” after a strong run.
Investors are worried about Evergrand’s ability to act on Friday, as well as “massive leverage” in China’s real estate sector, but the likelihood of losses outside its borders will likely be “very limited” in a phone interview Friday with Miami’s JPMorgan Private Bank investment expert. “It would not be a disaster for the financial system outside of China,” Gorja said, as “very little exposure” to Chinese real estate is seen in other countries.
The technology-based Nasdaq Composite Index was under pressure on Friday as Treasury yields continued to climb in the wake of the Fed’s policy statement on Wednesday, with the 10-year Treasury note rate up 1.44% on Friday. Yield growth affects the discount rate used for equity valuation. Tech stocks are particularly sensitive to high yields because estimates of rapid earnings growth are made in their assessments.
The Fed meeting revealed that central bankers had forecast a possible rate hike in 2022, indicating that they were “ready to deal with this inflation situation and make sure it is there.” Although Gorja believes inflation is short-lived, JPMorgan expects the first rate hike in early 202 to be early, saying it was good to see the Fed “ready to move if necessary.”
Gorja explained, “You can push the market valuation a bit, but massive inflation can destroy it all.”
China also hit some technology stocks by cracking down on bitcoin on Friday. Crypto-exchange Coinbase COIN
The retail trading platform fell like Robinhood Hood,
Which has accounted for more than half of its transaction-related revenue from crypto in the last quarter.
“Equity markets continue to reflect the war between bulls and bears, with markets heading towards mixed weeks,” writes Mark Hackett, head of investment research at Nationwide.
Friday’s unexpected move comes after two strong days of gains for Wall Street stocks following the Fed’s policy meeting on Wednesday. The Fed has been an “overhang” for the market discussing its bond purchase cuts, Peron said, as investors await a potential announcement this year.
In fact, Loretta Mester, president of the Cleveland Federal Reserve, said Friday that she looked at the Fed’s monthly purchases of Treasury and mortgage-backed securities starting in November, ending in mid-2022. Of the Federal Open Market Committee, but he will be one next year.
Investors have also continued the recent news in China’s Evergrand, a property developer that helped create a frustration on Monday, amid fears of a global outbreak of highly leveraged firms. As of Thursday, bondholders have not yet received any money from Evergrande HK: 3333,
Which was to pay 83 83.5 million in interest on the dollar bond, the Wall Street Journal reported.
The company has a grace period of 300 days to make the payment, but omitting it may result in an evergreen default. That stock fell 12% in Hong Kong on Friday. Elsewhere, media reports said Friday that the company’s electric vehicle unit had not paid suppliers for months, and that employees had not received their September salaries.
Meanwhile, House Speaker Nancy Pelosi on Wednesday vowed not to allow government funds to expire next week, raising some concerns about investors that politics could partially shut down the government and default on U.S. debt that could affect markets.
Separately, on Friday, President Joe Biden, following an unusual move by the head of the Centers for Disease Control and Prevention, called on people eligible to “get a booster”, dismissing a panel of advisers who said booster is a Covid-1 vaccine only for those over 655 years old. And for those who have a weak immune system, it is advisable to offer the front row staff, including nurses, teachers and supermarket staff.
On the data front, U.S. new-home sales rose 1.5% to 740,000 a year, the government said Friday. An equivalent figure of how many homes will be sold in a year if the same number is purchased per month based on the sales rate in July. Compared to a year ago, sales were down 24%. Economists surveyed by MarketWatch had a moderate forecast that new homes would be sold at an annual rate of 720,000 for August.
Which company is in focus?
Shares of Nike Inc.
The sportswear maker fell nearly 6% after Wall Street reported lower-than-expected sales, saying wages and additional costs depended on revenue.
Costco Wholesale Corporation
Shares rose nearly 3% as the retailer topped নেট 60 billion in net sales for the first time in a single quarter, reaching 5 5 billion in annual profits and growing at its fastest pace in more than 20 years.
Shares of Carnival Corporation. CCL rose 2.7% after cruise operator gave an update to its third quarter.
Deutsche Bank analyst Michael Linenberg has launched a “buy short-term catalyst call” Delta Air Lines Inc.Its stock DAL, + 1.84% on Friday, said it believes this year’s low performance so far will go into outperformance in the coming months. Delta shares rose 1.9%
Shares of Of the Year Inc.. Years
Wells Fargo analyst Steven Kahl lost 4% after downgrading the stock to overweight.
Are other assets traded?
Yield at 10 year Treasury Note BX: TMUBMUSD10Y
Increased by about 3 basis points to close at 1.46%.
ICE US Dollar Index DXY,
The currency measure fell 0.1% to 93.33 against a dragon of rivals, but rose about 0.2% during the week.
The oil futures were climbing with the US benchmark CL00
About 0.9% above 73.94 per barrel. Gold Futures GC00
The high ended, rising 0.1% to settle at 75 1,751.70 an ounce, but was relatively flat for the week.
In Asia, Hong Kong’s Hang Seng Index HK: HSI
China’s CSI 300 index XX: 000300, down 1.3% and down 2.9% weekly
Virtually unchanged and 0.1% weekly fall log. Nikkei 225 Index JP: NIK
By jumping 2% in the session, it helps to bring the weekly decline to 0.8%.
In Europe, Stoxx Europe 600 XX: SXXP
Closed 0.9% but gained 0.3% weekly, while the FTSE 100 Index UK: UKX
0.4% less closed but 1.3% weekly advance booking.
B Barbara Colmeyer contributed to this report