Wall Street rebounded in the aftermath of Black Tuesday which saw Nasdaq suffer the strongest loss since March. A few minutes after the start of the trading day, the Dow Jones rose by 0.33% to 34,412 points; the S&P 500 advanced 0.24% to 4,363 points, while the Nasdaq gained 0.44% to 14,611 points.
In the background, the warning launched yesterday, on the occasion of his speech in the US House of Representatives, by US Treasury Secretary Janet Yellen.
The former Fed number one warned that Congress has until October 18 to raise or suspend the debt ceiling. If it fails to do so, the consequences for the US economy would be very serious, Yellen stressed, as the United States would suffer an unprecedented default.
The scenario is also worrying JP Morgan, as the same number one, CEO Jamie Dimon admitted, telling Reuters that the bank he manages is preparing for the possibility of the United States defaulting, although it is convinced that, in the end, a solution will be found to avoid a “potentially catastrophic” event.
The number one banking giant in the United States has begun to come up with a scenario that simulates how money markets, repo transactions, client contracts, JP Morgan’s own capital ratios would react and, also, what would be the reactions of rating agencies.
The performance of Wall Street in September remains negative: the Dow Jones and the S&P 500 lost 3%, while the Nasdaq slipped by more than -4.5%.
Among the titles in the spotlight was Netflix, after the video streaming company belonging to the FAANG group announced that it had bought the video game producer Night School Studio, in order to diversify its sources of revenue. Night School Studio is best known for the “Oxenfree” video game.
The rates on US Treasuries are taking a step back today, falling to around 1.52%, a factor that mainly supports hi-tech securities, which yesterday had discounted the jump in yields with heavy losses. In addition to Netflix, Facebook, Amazon, Apple, Nvidia and Zoom Video are catching up.
Under pressure, however, Micron, which announced that it closed its third quarter financial statements with earnings per share of $ 2.42 per share, better than the estimates of 9 cents. The turnover was also better than expected. However, Micron’s outlook for the current quarter proved worse than expected.
On forex, the euro is under pressure: the single currency continues to discount the prospect of faster US inflation. On the other hand, it was the same number one of the Federal Reserve, Jerome Powell, who warned the American Congress yesterday that American inflation could last longer than expected.
The dollar reacted immediately, with the Dollar Index leaping to an 11-month record at 93.805 in the last few hours, against Treasury rates that flew past 1.55% yesterday, up 25 basis points. in just five sessions, ahead of the Fed’s tapering, now imminent.
The euro fell as a result, sliding to $ 1.1636, a November 2020 low of $ 1.1602.