2024-04-15 20:24:00
US stock indices turned lower at the end of Monday’s session, with the fear index rising to the highest level in more than 5 months, amid selling US bonds as markets assessed the prospects for monetary policy, following the release of retail sales data, which showed the resilience of consumption despite inflationary pressures.
At the end of trading, the Dow Jones Industrial Average fell 0.65%, or 248 points, at 37,735 points, while the S&P Index fell by 1.2%, at 5,061 points, and the Nasdaq Index ended trading down 1.8%, or 290 points, at 15,885. a point.
The US stock volatility index (VIX), also known as the “Wall Street Fear Index,” rose to the highest level since October, pushing trading in options contracts associated with it to the highest level in 6 years.
The VIX index rose by 10.5% to 19.13 points, after touching 19.43 points earlier in the session, heading towards the highest settlement since October 30, when it recorded 19.75 points.
The VIX index depends on options trading activity linked to the S&P 500 index, and it rose during today’s trading in conjunction with the increased demand for hedging against market fluctuations.
Investors can also trade options and futures linked directly to the VIX index itself, and nearly 2.6 million of these options contracts were actually traded on Friday, compared to the 20-day average of 806,000 contracts, the highest level since February 2018.
During the session, Wall Street received support from new economic data, as retail sales grew at a pace exceeding expectations during the past month, which indicates the strength of consumer spending during the first quarter of the year, especially with February data revised upward.
According to US Commerce Department data released Monday, retail and food service sales rose 4% year over year in March, while core sales – which exclude vehicles and parts – increased 4.3% during the same period.
On a monthly level, retail sales increased by 0.7% in March, compared to a growth of 0.9% in February’s reading, revised upward from 0.6%, and against expectations of an increase of 0.3% during the same period. During the first three months of the year, sales increased by 2.1% compared to the corresponding period of the previous year.
- Corporate results
Goldman Sachs announced first-quarter earnings of $11.58 per share, which was higher than analysts’ expectations of $8.56 per share. While the bank achieved revenues of $14.21 billion, compared to expectations of $12.92 billion.
David Solomon, CEO of Goldman Sachs, has taken it upon himself to improve the bank’s conditions since last year. After shifting away from retail banking, the bank’s focus was on growth in its asset and wealth management division.
In addition, Tesla shares fell 3.37% despite the company announcing its intention to lay off more than 10% of employees around the world, or about 14 thousand people, as part of its efforts to reduce costs and enhance productivity, amid the slowdown in demand for electric cars, according to Bloomberg. .
In a letter to employees, a copy of which was obtained by the Electric website, the company’s CEO, Elon Musk, said: “As we prepare the company for the next stage of growth, it is very important that we take reducing costs and increasing productivity into account. As part of this effort, we conducted a comprehensive review and made the difficult decision to reduce our headcount by more than 10% globally. “There’s nothing I hate more than that, but there’s no getting away from it.”
The number of Tesla employees reached 140,473 employees at the end of last year, nearly double the total number three years ago.
Oil prices fell on Monday after the tone of calm that prevailed following the escalation of tensions in the Middle East and the unprecedented Iranian strike on Israel. Brent crude futures fell 35 cents, or 0.39%, to reach $90.10 per barrel upon settlement, while US crude futures fell 25 cents, or 0.29%, to reach $85.41 per barrel upon settlement.
Gold futures prices turned higher during Monday’s trading, supported by demand for safe havens in light of escalating geopolitical tensions, and despite US bond yields and the dollar index recording their highest levels in five months following the release of economic data.
Upon settlement, gold futures prices for June delivery rose 0.35%, or $8.9, at $2,383 an ounce, the ninth record level this month, after touching $2,340.20.
The dollar index increased by 0.15% to 106.18 points, after touching 106.23 points, its highest level since November 2 (106.51 points).
According to data from the US Department of Commerce, retail sales rose by 0.7% in March, compared to a growth of 0.9% in February’s reading, revised upwards from 0.6%, which exceeded market expectations for a 0.3% increase during the month.
- European stocks
The standard European stock index closed flat on Monday, with energy company shares declining due to weak oil prices and a rise in industrial sector shares, while investors closely followed developments in the Middle East.
The European STOXX 600 index closed 0.1 percent higher. Shares of the industrial and automotive sectors rose 0.8 percent and 0.7 percent, respectively, after the Ifo Institute for Economic Research said that German manufacturers were less affected by the shortage of materials.
The German DAX rose +0.54%, the French CAC rose +0.43%, while the British FTSE fell -0.38%.
Investors are awaiting any developments in the Middle East after Iran launched a retaliatory attack on Israel earlier this week, raising the risk of a broader conflict in the region.
Shares of defense companies rose 0.8 percent, following the example of their American counterparts.
Oil prices fell by more than 1 percent as the market downplayed the risk of a broader conflict in the region after the Iranian attack, pushing energy company shares down 1.5 percent.
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