Investors’ attention is now turning to the anticipated speech by Federal Reserve Chairman Jerome Powell at next week’s Jackson Hole Symposium.
Win McNamee / Getty Images
US stocks fell again on Thursday as the future of US monetary policy and global growth concerns related to the Covid-19 pandemic weighed on stocks.
In the morning it is
Dow Jones industry average
fell 199 points, or 0.6%, while the
fell 0.3% and the
Initial jobless claims fell to 348,000 last week, the Labor Ministry announced on Thursday, a new pandemic low and better than economists predicted. Losses on major indices eased after the unemployment claims result blew up.
Still, the stock market signaled concern about the economy. About half of the S&P 500 stocks fell, according to FactSet, and value stocks, whose earnings are more responsive to changes in economic demand, underperformed the major indices.
Investors will watch to see if US stocks rebound after the S&P 500 fell more than 1% on Wednesday and posted its largest daily loss in a month. Analysts noted that the narrative from the last trading session was largely unchanged as the markets kicked off Thursday.
Concern centered on the revelations from the minutes of the Fed’s monetary policy committee in July. Greater concerns about global economic growth, especially given the more contagious Delta variant of the coronavirus, also dampened investor sentiment.
The Fed’s Open Markets Committee minutes suggested the central bank could begin slowing its massive monthly asset purchases as early as this year – a pandemic-era move to inject liquidity into financial markets.
“Investors fear that central banks are ready to tighten their policies this fall due to a global economic slowdown,” writes Tom Essaye, founder of Sevens Report Research.
One explanation for the post-opening rally is that investors were expecting the Fed to signal a change of course. Some therefore seem to be buying the dip. “That [Fed minutes] The release has likely done little to change consensus expectations that the throttling will begin early next year and the Fed Funds rate will increase in mid-2023, ”writes Chris Senyek, Chief Investment Strategist at Wolfe Research.
The bigger concern right now is that high inflation could undermine economic demand. Security restrictions around the world are restricting supply, increasing production costs for companies and forcing them to raise sales prices. Wolfe Research data shows a historically close correlation between inflation and economic data surprises, but the two have recently decoupled; the consumer price index is up 5.4% yoy, while a surprise index for the US business cycle has fallen during this period.
In Asia, Hong Kong
declined by 2.1%, while the
slipped 0.6% and Tokyo
decreased by 1.1%. That
in London was 1.5% lower than the pan-European
decreased by 1.7%. That
in Paris, 2.2% slipped into the red and Frankfurts
Raw materials were also struck. Futures contracts on copper, a major industrial metal and a barometer of global economic sentiment, fell nearly 3% to extend the decline to 10% last month. Benchmark Brent crude changed hands at just over $ 66 a barrel, down 3%.
(Ticker: NVDA) The stock rose 1.2% after reporting earnings of $ 1.04 per share and estimates of $ 1.01 per share on sales of 6.5 billion Exceeded $ 6.3 billion, beating expectations for $ 6.3 billion.
(M) share rose 15% after reporting earnings of $ 1.29 per share, beating and exceeding estimates of 19 cents per share on revenue of $ 5.6 billion was in line with expectations for $ 5 billion.
Bath and body work
(BBWI) stock rose 7.3% after reporting earnings of $ 1.34 per share, up against estimates of $ 1.05 per share on revenue of $ 1.7 billion Dollar exceeded what was expected.
(KSS) stock rose 7.6% after reporting earnings of $ 2.48 per share, beating and exceeding estimates of $ 1.21 per share on revenue of $ 4.5 billion was in line with expectations for $ 4 billion.
(ILMN) shares fell 8.6% after acquiring cancer test maker Grail for $ 7.1 billion.
Write to Jacob Sonenshine at [email protected]m