Wall Street opens lower, wait-and-see before Fed meeting

Peter Cardillo on Us Market’s Inflation Number; Wall Street Opens in the Green
December 13, 2021
Le Fonti TV Interview 12-14-21
December 14, 2021

Wall Street opens lower, wait-and-see before Fed meeting

The New York Stock Exchange opened lower on Monday, after a record session on Friday, pending the meeting of the US Central Bank (Fed), whose market expects a further monetary inflection.

Around 3:10 p.m. GMT, the Dow Jones lost 0.69% to 35,772.79 points, the Nasdaq index, with a strong technological composition, lost 0.15% to 15,606.83 points, and the extended S&P 500 index, 0.40 % at 4,692.94 points.

On the upside before opening Monday, Wall Street failed to keep up the momentum of the end of last week.

All three indices finished in the green on Friday, with the S&P 500 even setting a new record, the 67th of the year.

For many observers, the market is expected to move within a relatively narrow range by the end of the Fed’s meeting on Wednesday, which will be followed by a press conference by Chairman Jerome Powell.

Investors have already largely digested the probable inflection that the institution is preparing to give to its monetary policy, with a possible acceleration in the withdrawal of purchases of financial assets, before one or more rate hikes.

“The market prefers a Fed more oriented towards monetary tightening, which would avoid more radical measures to fight inflation,” said Peter Cardillo, market economist for Spartan Capital Securities.

Operators will also take a close interest in the “dot plot”, the grid which shows, for each member of the Fed’s monetary policy committee, expectations of short, medium and long term rate changes. This is sometimes an opportunity for the market to better perceive the mood of central bankers.

Pending the Fed’s communication, the market will not have any important macroeconomic indicator to put in their mouths on Monday and Tuesday, and very few corporate publications are expected, which explains the relative sluggishness of Wall Street. This is all the more so since the probably limited impact on the world economy of the new Omicron variant of the coronavirus has also already been taken into account by investors.

Peter Cardillo pointed out that, like the equity markets, the American bond market did not move much, its benchmark rate, namely the 10-year yield on American government bonds, easing slightly, to 1.44% against 1.48 % Friday.

At odds, Peloton rebounded (+ 4.74% to 40.33 dollars) after its poor session on Friday. Caught in a media storm after the death of a key character in the series “Sex and the City” on a bike of the brand, the group counterattacked in two stages.

After the cardiologist, a member of its scientific committee, who explained with humor on Friday that the death was undoubtedly more related to the lifestyle of Mr. Big, the character in question, than to the use of a bicycle. ‘apartment, Peloton posted a spot on Sunday with the resurrected actor Chris Noth (who plays Mr Big).

Sign of a market that favors large caps and blue chip stocks, the cinema chain AMC was shunned (-8.67%), as was the cruise line Carnival (-5.45%), the airline company United Airlines ( -5.95%) or the Macy’s department store chain (-5.72%).

Conversely, up slightly, Apple (+ 1.12% to 181.46 dollars) was only a breath away from the symbolic threshold of 3 trillion dollars (2.979), never crossed by a listed company. .

Pfizer profited (+ 4.05% to 54.92 dollars) from the announcement of the acquisition, for 6.7 billion dollars, of the laboratory Arena Pharmaceuticals, which develops treatments for diseases affecting the intestines and stomach .

Harley-Davidson took off (+ 14.19% to $ 42.03) after indicating that its LiveWire electric motorcycle business was going to be floated on the stock market via an already listed vehicle, this new entity having a value of $ 1.8 billion .