AFP, published on Thursday 05 May 2022 at 23:15.
The New York Stock Exchange signed its worst session since 2020 on Thursday, with investors taking the opposite view of the previous day’s recovery after a second reading of the Fed’s announcements on Wednesday.
The Nasdaq recorded the third largest point loss in its history, after the two black sessions on March 12 and 16, 2020, at the beginning of the coronavirus pandemic.
The technology index fell 4.99%, while the Dow Jones fell 3.12% and the broader S&P 500 index fell 3.56%.
“We had one of the best sessions yesterday and one of the worst today,” said Edward Jones’ Angelo Kourkafas.
The market recovered on Wednesday from the comments of the US Federal Reserve Chairman Jerome Powell, who had ruled out further tightening of monetary policy and an increase of 0.75 percentage points in its next session, the market regained its senses on Thursday. .
“The fact that the US Federal Reserve ruled out a 0.75 percentage point increase has not really changed the fact that the economy is slowing down and the Fed is going to tighten monetary policy at a high rate,” he said. .
“People started thinking a little more about the Fed and its communications and realized that things were not going to get better,” said Maris Ogg of Tower Bridge Advisors.
For her, Thursday’s move is also explained by the gains, which followed the jump the previous day, as well as the rise in bond rates.
“This is what scared the stock market,” he said.
The yield on 10-year US government bonds jumped above 3.10% for the first time since November 2018.
As usual, the first to come under fire from investors were technology and growth stocks, which now weigh the heaviest on Wall Street.
Apple (-5.57%), Microsoft (-4.36%), Tesla (-8.33%) or Amazon (-7.56%) were wholesale. The latter has shrunk by almost 20% since the publication of its results a week ago and has written off more than 280 billion in market valuation.
The New York market has also been misled by some mixed corporate results, accompanied by very measured, even pessimistic forecasts.
“The companies with the best numbers usually publish first” during the profit season, says Maris Ogg. “Evil comes later,” as it is now, he says.
Wall Street noted a number of posts from e-commerce sites that were considered to have no problem, even worrying.
The eBay e-sales site fell below analysts’ forecast for the second quarter (-11.72% to $ 48.04), despite sales and profits above the Wall Street Consensus.
The e-commerce platform Shopify also collapsed (-14.91% to $ 413.09), after the publication of a much lower-than-expected turnover, as well as a significantly higher loss.
Twitter benefited (+ 2.65% to $ 50.36) from the communication of Elon Musk, who managed to raise seven billion dollars from investors to finance the acquisition of the platform.
This amount, raised by funds and wealthy investors, such as businessman Larry Ellison or Saudi Prince Al-Walid ben Talal, will help reduce the amount borrowed by banks for the business.
Snap (-9.58%), Meta (parent company of Instagram, -6.77%) or Alphabet (parent company of YouTube, -4.76%) suffered after their toughest competitor, TikTok, revealed on Wednesday that it was going to generate advertising revenue sharing system with the platform’s most popular creators.
“The market will continue to be volatile until we have confirmation that inflationary pressures are easing and bond rates are with them,” said Angelos Kourkafas.