The US stock market has risen throughout the week, but turns back down on the last trading day of the week. This is how the key indices look just after 20:00:
- The S&P 500, which consists of 500 of the largest publicly traded companies in the United States, is flat
- The Nasdaq Composite, which is dominated by technology companies, rises 0.25 percent
- The Dow Jones Industrial Average, which is made up of 30 hand-picked stocks believed to be important, is flat
The broad S&P 500 index has risen around three percent so far this year, partly thanks to a fall in long-term government yields.
The banks are falling
A number of major banks presented results for the fourth quarter before the market opened. For the giant JPMorgan Chase, both turnover and profit were better than expected, but the bank also made loss provisions of 2.3 billion dollars in the quarter. It was more than expected in advance, and an increase of almost 50 per cent from the third quarter.
– It is a back and forth market. I don’t buy the intense gloom some have, who say it’s going to get a lot worse, or the other end of the scale – that we’re in a new boom. I don’t think we’re quite there either, says investment director David Donabedian at CIBC Private Wealth to the Bloomberg news agency.
JPMorgan now expects a “mild” recession in the US, where unemployment could rise as high as 4.9 percent in the fourth quarter, from today’s historically low level of from today’s level of 3.5 percent.
– We still do not know the full effect of the headwinds from geopolitical tensions, including the war in Ukraine, the vulnerable situation in energy and food supply, persistent inflation that erodes purchasing power and has pushed interest rates higher, CEO Jamie Dimon said, according to CNBC.
Wells Fargo shares are down nearly four percent after earnings were halved from the same quarter last year. Bank of America and Citigroup were almost unchanged in the opening minutes.
Tesla ned
Tesla fell off the start after having cut the prices of its cars considerably in both the US and Europe. In the 20s something was brought in, and the share was down 2.3 per cent. Tesla is dragging car manufacturers Ford and General Motors along with it in the drag, both down around five percent.
Investment director Robert Næss at Nordea calls Tesla’s price cut dramatic.
– This could have consequences for competitors. There is a big risk that other car manufacturers will have to lower prices in order to compete against Tesla. Those in the same segment don’t really have much choice, says Næss to Bergensavisen.
The Tesla share has fallen close to 70 percent since its peak last year, partly as a consequence of the turmoil in the world economy with high inflation and increased interest rates. Inflation figures for December came on Thursday, which was exactly as expected at 6.5 per cent.
The market is pricing in a predominant probability that the US central bank (Fed) will raise interest rates by 0.25 percentage points to 4.75 per cent at the rate meeting in February. The market believes that the interest rate will reach a peak of close to five percent in the summer, but the market also believes that the Fed will cut the interest rate twice during the second half of the year. This despite the fact that the Fed will raise the interest rate above five percent and keep it there. (Terms)Copyright Dagens Næringsliv AS and/or our suppliers. We would like you to share our cases using links, which lead directly to our pages. Copying or other forms of use of all or part of the content may only take place with written permission or as permitted by law. For additional terms se her.
