The S & P500 recovered most of the losses after a poor start to the session

2022-01-10 22:10

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2022-01-10 22:10

The S & P500 recovered most of the losses after a poor start to the session
The S & P500 recovered most of the losses after a poor start to the session
photo: Javen / / Shutterstock

Monday’s session on Wall Street started with considerable drops, but at the end of the day investors recovered most of the losses and the day ended with slight changes in indices. Analysts indicate that investors are getting rid of assets of growth companies in view of the possibility of the Fed starting to tighten monetary policy.

Dow Jones Industrial closed by 0.45 percent at the close to 36,068.87 points. The S&P 500 lost 0.14 percent at the end of the day. and amounted to 4,670.29 points. From the beginning of the week, the index fell 1.8%. The Nasdaq Composite climbed 0.05 percent. and closed the session at 14,942.83 points.

Tesla dropped 2.5 percent during the day. after CEO Elon Musk tweeted on Friday that an electric car maker would raise the price of its advanced driver assistance software in the US.

Zynga grew by 45 percent. The online gaming developer shares increased after it agreed to the game developer Take-Two Interactive’s acquisition of $ 9.86 per share, in cash and stocks, for a total transaction value of $ 12.7 billion. Take-Two has dropped more than 15 percent.

During the day, the Nasdaq lowered significantly, by more than 2 percent. At some point, the index was down to 10 percent. below the peak in November 2021, which was a signal that the market entered the correction phase. Many tech and growth companies fell in the first week of 2022 as investors began recalibrating their portfolios to accommodate the announcement of a more hawkish Federal Reserve policy.

During the day, the meta dropped 3%, and Amazon and Alphabet were down 2%. At the end of trading, however, investors recovered most of their losses.

The banking sector gained 9.4 percent. last week, when government bond yields rose on expectations for interest rate hikes.

Markets estimate over 70 percent. chances for an interest rate hike to 25 bp during the Fed meeting in March and at least two more hikes by the end of the year. In turn, Goldman Sachs forecasts four rate hikes. in the US this year. Therefore, investors are waiting for the December CPI reading on Wednesday and the December CPI reading on Thursday.

“The sustained rise in consumer inflation may further strengthen the Fed hawks, push them to a steeper normalization path and, more importantly, fuel expectations that the Fed should quickly reduce the size of its balance sheet to avoid yield curve flattening while fighting inflation,” she said. Ipek Ozkardeskaya, Swissquote analyst.

“Inflation is higher than expected, the Fed signaled three rate hikes this year (the market started pricing in the possibility of four), the Omikron variant again puts global GDP growth into question, and supply chain constraints remain an important issue,” said strategist Canaccord Genuity Tony Dwyer.

The earnings season for the fourth quarter will begin on Friday. Quarterly reports will be published, among others, by: JPMorgan, Goldman Sachs, Bank of America, Morgan Stanley, Wells Fargo, Citigroup.

Analysts estimate the profit growth rate at 21.7 percent. for the S&P 500 index in the fourth quarter, which, according to FactSet, would be the fourth consecutive quarter with earnings growth above 20%. (PAP Biznes)

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Source:PAP Biznes

About Eric Wilson

The variety offered by video games never ceases to amaze him. He loves OutRun's drifting as well as the contemplative walks of Dear Esther. Immersing himself in other worlds is an incomparable feeling for him: he understood it by playing for the first time in Shenmue.

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