2023-08-15 20:30:00
The New York Stock Exchange faltered on Tuesday, worried about signs of weakness in the Chinese economy but also concerned for the financial stability of American banks.
The Dow Jones index fell 1.02% to 34,946.39 points, the tech-heavy Nasdaq lost 1.14% to 13,631.05 points and the broader S&P 500 index returned 1.16% to 4,437.86 points.
The VIX index, or so-called “fear” index because it measures price volatility, jumped 10% to 16 points.
US stocks “have been weighed down by growing concerns that China is in much worse shape than previously thought,” said Edward Moya, an analyst at Oanda.
China’s central bank cut its benchmark rate to 2.50% to boost lending as industrial production growth stalled and retail sales rose just 2.5% year on year in July, much less than expected.
In the United States, the good health of the consumer was a surprise with an increase in retail sales in July of 0.7% against +0.4% forecast for the month and 3.2% over one year.
But this good news is double-edged. “A healthy consumer is supposed to lead to a soft landing for the economy, but too much consumer resilience will cause the Fed to hold rates higher for longer,” the Oanda analyst said.
Also, on the inflation front, import prices rose 0.4% in July, the biggest rise in more than a month, driven by rising energy costs.
Added to these macro-economic elements were the comments of an analyst from the Fitch rating agency, which caused clear risk aversion among investors.
On the financial channel CNBC, Chris Wolfe of Fitch recalled that the rating agency had revised negatively at the end of June its opinion on the general health of the financial sector without this having been really noticed.
But if this general rating were to be lowered “this would lead to a recalibration of the financial barometers and would probably result in rating downgrades” for individual banks, said this analyst.
On August 9, Moody’s had already downgraded the rating of a dozen regional banks.
“Downgrading the industry’s rating in general would in effect force Fitch to downgrade various banks because banks’ ratings cannot be higher than the industry’s rating,” said José Torres, economist for Interactive Brokers.
Along with energy (-2.44%), the banking sector (-1.91%) is the one that led the train of falling shares on Wall Street.
JP Morgan lost 2.59%, Goldman Sachs dropped 1.67% and Bank of America fell 3.22%.
Regional banks, at the origin of the banking crisis last March, also lost altitude such as PacWest Bancorp (-3.71%), Western Alliance (-4.12%) and Zions Bancorporation (-4, 49%).
Elsewhere, the DIY giant Home Depot ended up 0.66% after announcing results very slightly above forecasts in the second quarter, despite everything reporting sales down 2% and a net profit in decline of 9.9%.
The brand, which had lowered its annual forecasts in the previous quarter, confirmed them this time while noting that consumers were more reluctant to make large expenditures for purchases of durable goods or renovation projects.
A newcomer to Wall Street, the Vietnamese electric vehicle manufacturer VinFast has entered the Nasdaq with a bang.
VinFast merged with a SPAC, a listed company whose vocation is to make it easier for a company to enter the stock market.
Listed at the opening at 22 dollars, the title VinFast whose ticker symbol is VFS, climbed 68.45% to 37 dollars.
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