Wall Street fell again and was burned by sustained inflation-May 11, 2022 22:56

Wall Street Subway Station in New York (GETTY IMAGES NORTH AMERICA / SPENCER PLATT)

Wall Street Subway Station in New York (GETTY IMAGES NORTH AMERICA / SPENCER PLATT)

The New York Stock Exchange fell again on Wednesday and was uncomfortable with higher-than-expected inflation indicators. This could further tighten US monetary policy.

The Dow Jones fell 1.02% and the broader S & P 500 index fell 1.65%, especially above the Nasdaq Index, resulting in 3.18%.

Since its peak at the end of November, the barometer of tech stocks has melted almost 30%.

The entire session was characterized by the announcement of the CPI Consumer Price Index, which was released at 8.3% in April, before Wall Street opened. It fell from 8.5% in March, but exceeds the 8.1% expected by economists.

Earlier that day, Index rode a roller coaster, showing the opposite of the two visions of the indicator.

On the one hand, positive reading. Cliff Hodge of Cornerstone Wealth concludes that inflation “peaks in March”, which has begun a “slight slowdown.”

“The fear of a recession is exaggerated,” analysts said. “Consumers are strong and continue to spend.”

Other parts of the operator saw a warning signal in this publication.

“Inflation of underlying assets (excluding energy and food) has reached its fastest pace since January,” said Charlie Ripley of Allianz Investment Management.

“This sustained inflation will push the Fed more aggressively (rate hikes),” FHN Financial’s Will Compernolle predicted.

“Some (members of the Fed) may even insist on a 0.75 percentage point increase in June,” said Fed Chair Jerome Powell’s dismissal outlook last week.

“The longer inflation lasts, the more we can withstand lowering it,” said Keith Buchanan of Globalt. “That is what is causing the reaction in this market.”

The bond market, another example of the turbulent New York market, was shaken by brutal movements during the session.

Thus, yields on 10-year Treasuries rose from 2.90% to 3.07%, but almost eased to the level at the beginning of the day, 2.92%.

Regularly targeted for six months, Nasdaq was overwhelmed by the ghosts of monetary tightening with unprecedented momentum for over 40 years and toasted again.

The tech tycoon has reached its worst day of the year, with Apple losing 5.18%, Microsoft 3.32%, Tesla 8.25% and Meta (ex-Facebook) 4.51%.

In a week, Tesla saw its capital melt by almost 23%.

For the Dow Jones, we were able to reduce losses thanks to so-called defensive values, especially in the industrial sectors such as Caterpillar (+ 1.09%), Chevron (+ 1.48%) and Merck (+ 1.57%). Or the Dow (+ 1.49%).

Elsewhere on the stock exchange, the Coinbase cryptocurrency trading platform fell (-26.44% to $ 53.72) after being announced on Tuesday after trading and after lower-than-expected results were announced.

As the cryptocurrency routs, the group saw monthly user numbers and transaction volumes decline from the fourth quarter.

From the Robinhood Stock Exchange (-12.08%) to the index fund ProShares Bitcoin Strategy ETF (-6.48%), the entire sector was in turmoil.

The first investment product of this kind, launched at fanfare last October, has lost more than half of its value since then.

Other new economic and financial companies such as payment specialist Block (ex-Square, -15.61%) and online credit payment company Affirm (-19.57%) were also suffering.

Electronic Arts surged (-7.97% to $ 120.49) despite the announcement of the end of its historic partnership with Fifa in the game of the same name and lower-than-expected quarterly results. ..