Wall Street ends lower, consolidation ahead of results

New York (AFP)

The New York Stock Exchange ended lower on Tuesday, lacking vigor before a first wave of corporate earnings on Wednesday and with the prospect of increasingly present monetary normalization.

The Dow Jones lost 0.34% to 34,378.34 points, the high-tech Nasdaq index 0.14% to 14,465.92 points and the S&P 500 expanded 0.24% to 4,350.65 points.

“The market is looking for a direction, but it won’t find it until we see corporate results,” said Tom Cahill, head of portfolio strategy at Ventura Wealth Management.

The earnings season kicks off fully on Wednesday, with JPMorgan Chase and Delta Air Lines, before another volley of bank stocks on Thursday.

Investors will be more interested in statements by executives for the current quarter and beyond, rather than the third quarter numbers, which are already dated.

Price hikes, supply disruptions, difficulties in recruiting, Tom Cahill expects to hear listed a series of problems that most companies have been facing for several quarters.

“It is possible that companies have to lower their forecasts” because of these factors, presented as transitory but which are taking hold in the economic landscape.

In addition, the market also paid attention on Tuesday to the speech of Vice President of the American Central Bank (Fed) Richard Clarida, who estimated that the recovery of the job market was sufficiently advanced to justify a slowdown in purchases of assets by the Fed, which would signal the start of monetary normalization.

“There are things that are worrying the market, but the environment remains favorable for equities,” said Tom Cahill. “We are just going through a phase of consolidation.”

With the US economy slowing down and businesses less celebratory than at the start of the year, this phase of consolidation could last for all or part of the earnings season, he warns. “The market lacks a catalyst to the upside.”

After having accelerated sharply in recent days, bond rates eased. The ten-year US government bond yield fell back to 1.57%, after starting the day at 1.63%.

On the stock chart, Nike gained 2.04% to $ 153.35 after the publication of a note from Goldman Sachs advising the stock to buy and arguing that the US sports equipment manufacturer’s current supply problems were transient.

The temporary housing rental platform Airbnb gained 3.65% (to 172.75 dollars) thanks to a note from the financial firm Cowen, for which investors underestimate the upturn in rentals in 2022 and the market potential to long term.

General Motors advanced 1.50% to $ 58.96 after announcing that LG will offset up to $ 1.9 of the additional $ 2 billion in costs related to defects in the battery of its manufactured Bolt electric vehicles. by the Korean group.

Its competitor Tesla (+ 1.74% to 805.72 dollars) took advantage of record sales figures from China. The premium electric vehicle maker sold more than 56,000 cars in that country in September, according to the China Passenger Car Association.

The cryptocurrency exchange Coinbase fell 2.80% (to $ 249.33) after statements by CEO of US bank JPMorgan Chase, for whom bitcoin “has no value.” After a ride that saw it take more than 40% in ten days, bitcoin was catching its breath (-3.43%) at $ 55,389.

Several microprocessor giants have had a difficult session, weighed down by forecasts from research firm TrendForce, which announces a correction in 2022 on the market for so-called DRAM (so-called dynamic random access memory) chips, used in PC computers and servers computer science.

After months of chasing demand, supply should eventually exceed it and push prices down, according to the firm. Among the main producers of this chip, the American Micron was particularly attacked Tuesday (-3.61% to 66.72 dollars), but Intel (-2.38% to 52.17 dollars) or Qualcomm (-1, 59% to 122.95 dollars) also won.

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