American Stock Market: Surprises and Unpredictability
October 18, 2023 4:23 am
Recently, the US market has been experiencing unusual fluctuations. Summarizing the last trading day, it’s worth noting that US retail sales in September exceeded all forecasts. However, the profits of the country’s two largest banks diverged: Bank of America’s profit soared, while Goldman Sachs’ decreased.
A highlight of the day was the statement from the administration of US President Joe Biden: they plan to suspend shipments of artificial intelligence chips to China soon.
What happened with the main indices? The Dow slightly gained in weight (+0.04%), the S&P 500 virtually remained in its positions (-0.01%), but the Nasdaq decreased (-0.3%).
Behind this lies an interesting economic picture.
The stock market on this Tuesday witnessed the growth of sectors like raw materials, oil, gas, and telecommunications. However, the technology sector, utilities, and healthcare, unfortunately, showed negative results.
Meanwhile, chip manufacturers faced serious challenges: Nvidia shares dropped by 4.7%. However, it should be noted that the company itself isn’t particularly alarmed, as they don’t anticipate significant financial losses due to the new policy.
Another point of interest is the yield of US Treasury bonds, which has sharply risen. This makes stocks less attractive to investors as government bonds offer high returns without the risks.
Nevertheless, several companies managed to surprise. For instance, Bank of America shares grew by 2.3% after the publication of quarterly results. The financial sector as a whole looks optimistic, showing a growth of 0.6%.
All in all, the market displayed lively activity and demonstrated that there’s always room for surprises in the economy.
Large companies are showing impressive revenues, but shareholders remain cautious due to the accelerated growth of yields, according to Peter Cardillo, chief economist at Spartan Capital Securities based in New York. Looking at the key indices, one can notice: the Dow Jones added 13.11 points, reaching 33,997.65; the S&P 500 dropped by only 0.43 points, settling at 4,373.2; and the Nasdaq Composite decreased by 34.24 points, dropping to 13,533.75.
An Interesting Phenomenon in September: U.S. retail sales growth exceeded forecasts. People were more active in purchasing cars and began to spend more in restaurants and bars. Additionally, the manufacturing sector showed growth above expectations.
However, it’s crucial to understand the following: positive economic news might suggest that the Federal Reserve will maintain high-interest rates for an extended period.
This might adjust expectations of a potential rate decrease in 2024, emphasizes Anthony Saglimbene from Ameriprise Financial.
Since March 2022, the Fed indeed significantly tightened its monetary policy, raising the base interest rate by 525 basis points in efforts to control inflation.
Moving on to company reports. Lockheed Martin shares increased by 0.2% due to better-than-expected revenue and profit figures for the third quarter. While Goldman Sachs showed profits above forecasts, the company’s shares still lost 1.6%.
The earnings season has just begun. According to LSEG data, analysts predict a profit growth of companies in the S&P 500 index by 2.2% compared to the previous year.
Activity on U.S. exchanges was high: the total volume was 10.25 billion shares, compared to the 10.41 billion average over the last 20 days.
On the New York stock market, shares of growing companies outnumbered the declining ones. A similar situation was observed on the Nasdaq.
Lastly, the S&P 500 index showed 17 new highs and six lows over the last 52 weeks, while the Nasdaq recorded 48 new highs and 151 lows.
The CBOE Volatility Index, used to measure the market’s expected volatility based on S&P 500 option trades, showed an increase, reaching 17.88, which is 3.89% higher than the previous figure.
December gold futures showed a slight increase of 0.04%, rising by 0.85, and reached a mark of $1,800 per troy ounce.
Switching to energy commodities, the price of WTI crude oil futures, set for December delivery, rose to $85.93 per barrel, an increase of 0.79% or $0.67 from its previous value. Similarly, Brent crude oil futures, also scheduled for December delivery, increased by 0.81%, or $0.73, and were priced at $90.38 per barrel.
On the foreign exchange market, major currency pairs displayed mixed results. The EUR/USD pair changed slightly, decreasing by 0.15% and reaching a rate of 1.06. Meanwhile, the USD/JPY rate rose by 0.19%, stabilizing at 149.79. The futures for the dollar index, which reflects the strength of the dollar against a basket of major currencies, decreased by 0.03%, settling at 106.00.
The material has been provided by InstaForex Company – www.instaforex.com
Recently, the US market has been experiencing unusual fluctuations. Summarizing the last trading day, it’s worth noting that US retail sales in September exceeded all forecasts. However, the profits of the country’s two largest banks diverged: Bank of America’s profit soared, while Goldman Sachs’ decreased.
A highlight of the day was the statement from the administration of US President Joe Biden: they plan to suspend shipments of artificial intelligence chips to China soon.
What happened with the main indices? The Dow slightly gained in weight (+0.04%), the S&P 500 virtually remained in its positions (-0.01%), but the Nasdaq decreased (-0.3%).
Behind this lies an interesting economic picture.
The stock market on this Tuesday witnessed the growth of sectors like raw materials, oil, gas, and telecommunications. However, the technology sector, utilities, and healthcare, unfortunately, showed negative results.
Meanwhile, chip manufacturers faced serious challenges: Nvidia shares dropped by 4.7%. However, it should be noted that the company itself isn’t particularly alarmed, as they don’t anticipate significant financial losses due to the new policy.
Another point of interest is the yield of US Treasury bonds, which has sharply risen. This makes stocks less attractive to investors as government bonds offer high returns without the risks.
Nevertheless, several companies managed to surprise. For instance, Bank of America shares grew by 2.3% after the publication of quarterly results. The financial sector as a whole looks optimistic, showing a growth of 0.6%.
All in all, the market displayed lively activity and demonstrated that there’s always room for surprises in the economy.
Large companies are showing impressive revenues, but shareholders remain cautious due to the accelerated growth of yields, according to Peter Cardillo, chief economist at Spartan Capital Securities based in New York. Looking at the key indices, one can notice: the Dow Jones added 13.11 points, reaching 33,997.65; the S&P 500 dropped by only 0.43 points, settling at 4,373.2; and the Nasdaq Composite decreased by 34.24 points, dropping to 13,533.75.
An Interesting Phenomenon in September: U.S. retail sales growth exceeded forecasts. People were more active in purchasing cars and began to spend more in restaurants and bars. Additionally, the manufacturing sector showed growth above expectations.
However, it’s crucial to understand the following: positive economic news might suggest that the Federal Reserve will maintain high-interest rates for an extended period.
This might adjust expectations of a potential rate decrease in 2024, emphasizes Anthony Saglimbene from Ameriprise Financial.
Since March 2022, the Fed indeed significantly tightened its monetary policy, raising the base interest rate by 525 basis points in efforts to control inflation.
Moving on to company reports. Lockheed Martin shares increased by 0.2% due to better-than-expected revenue and profit figures for the third quarter. While Goldman Sachs showed profits above forecasts, the company’s shares still lost 1.6%.
The earnings season has just begun. According to LSEG data, analysts predict a profit growth of companies in the S&P 500 index by 2.2% compared to the previous year.
Activity on U.S. exchanges was high: the total volume was 10.25 billion shares, compared to the 10.41 billion average over the last 20 days.
On the New York stock market, shares of growing companies outnumbered the declining ones. A similar situation was observed on the Nasdaq.
Lastly, the S&P 500 index showed 17 new highs and six lows over the last 52 weeks, while the Nasdaq recorded 48 new highs and 151 lows.
The CBOE Volatility Index, used to measure the market’s expected volatility based on S&P 500 option trades, showed an increase, reaching 17.88, which is 3.89% higher than the previous figure.
December gold futures showed a slight increase of 0.04%, rising by 0.85, and reached a mark of $1,800 per troy ounce.
Switching to energy commodities, the price of WTI crude oil futures, set for December delivery, rose to $85.93 per barrel, an increase of 0.79% or $0.67 from its previous value. Similarly, Brent crude oil futures, also scheduled for December delivery, increased by 0.81%, or $0.73, and were priced at $90.38 per barrel.
On the foreign exchange market, major currency pairs displayed mixed results. The EUR/USD pair changed slightly, decreasing by 0.15% and reaching a rate of 1.06. Meanwhile, the USD/JPY rate rose by 0.19%, stabilizing at 149.79. The futures for the dollar index, which reflects the strength of the dollar against a basket of major currencies, decreased by 0.03%, settling at 106.00.
The material has been provided by InstaForex Company – www.instaforex.com
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