Wall Street opens lower, worried about inflation

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October 5, 2021
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October 5, 2021

Wall Street opens lower, worried about inflation

The New York Stock Exchange opened in the red on Monday, worried about inflation, driven in particular by energy prices, after a week in slow motion despite a rebound on Friday.

Around 2:15 p.m. GMT, the Dow Jones lost 0.07%, the Nasdaq, which houses many technology stocks sensitive to interest rates and inflation, dropped 1.42%. The S&P 500 was down 0.36%.

At the last close, the Dow Jones had gained 1.43% to 34,326.46 points, the Nasdaq had gained 0.82% to 14,556.70 points, and the extended S&P 500 index had gained 1.15% to 4,357 , 04 points.

Over the week, the three indices lost 1.36%, 3.20% and 2.21% respectively.

“There are fears of inflation in the air,” said Peter Cardillo of Spartan Capital Securities. “10-year bond rates are going up a bit, not a lot, but investors are cautious,” the analyst said.

Yields on 10-year US Treasuries edged up to 1.49% from 1.46% before the weekend.

On Friday, the Commerce Department published a very high inflation figure (4.3% over one year in August, according to the PCE index) and an acceleration over the month.

“Global supply chain challenges continue to hamper economic activity and inflate inflation, while at the same time global monetary policies are expected to move on track. recovery, ”summarized Schwab analysts.

– OPEC, a test for the market –

Operators were also monitoring the OPEC + meeting on Monday as oil prices, including the recent rise along with other energy prices, raise fears of persistent inflation.

“The meeting of OPEC and the reaction of the price of black gold will be a test for the market”, assured the analyst of Spartan Capital Securities.

Member countries and their allies have chosen to renew their strategy of modestly increasing production for November, ignoring calls to open the floodgates further and pushing prices higher.

The benchmark US oil price hit a high since November 2014 on Monday.

The week will also be provided with indicators with the ISM activity index in services for September Tuesday, employment in the private sector Thursday and especially the official labor market figures for September Friday.

“Yet another reason for investors to remain wary,” added Mr. Cardillo.

Analysts expect some 450,000 job creations in September with an unemployment rate down slightly to 5.1% instead of 5.2%.

The setbacks of the Chinese real estate group Evergrande, which suspended its listing on the Hong Kong Stock Exchange on Monday, did not panic over the New York market, investors believing that the developer was seeking to refinance.

“I admit that the market is not reacting as negatively to the Chinese situation as I would have thought,” said Cardillo. The group is raising funds so maybe the market thinks that the crisis will be very limited, ”added the analyst.

Among stocks, electric car maker Tesla jumped 3.41% to $ 801 after announcing Friday that it had delivered more vehicles than expected in the third quarter. Tesla delivered 241,300 cars (+ 20%) against 220,000 expected.

Facebook lost 3.37% to $ 331.51 after a whistleblower accused the group of choosing “profit over safety” as internal research showed her social network Instagram was negatively impacting the market. adolescent morale.

The anti-Covid vaccine maker Moderna dropped 5.70% to $ 321 suffering from the announcement by Merck of a future pill supposed to greatly reduce the risk of hospitalization. Another lab in the run to market a coronavirus vaccine, Novavax, lost 3.62% to $ 175.

Six of the eleven sectors of the S&P 500 remained in the green, led by the energy sector (+ 1.99%). That of information technologies was up (-1.86%).