Wall Street tries to raise its head after three consecutive sessions of drops: at around 4 pm Italian time, the Dow Jones is up by 0.23%, the S&P 500 is up by 0.52% and the Nasdaq is up by about 1%.
However, the bears are just around the corner, especially after the hawkish statements that promptly arrive from the Federal Reserve, the US central bank.
This time it was Loretta Master, chairman of the Cleveland Federal Reserve and a voting member of the FOMC, the Fed’s monetary policy arm in charge of rate setting, who spoke.
Mester quashed hopes that the Fed could return to cut rates next year, after the aggressive hikes planned for this year, which have already begun to halt the surge in inflation.
“My view at the moment is that it will be necessary to bring fed funds rates above 4% by the end of next year to stay at that level,” Mester said, according to excerpts from a speech. reported by the CNBC.
This means that, according to Loretta Mester, Jerome Powell’s Fed will not cut rates throughout 2023.
At the moment, US rates are in the range between 2.25% and 2.50%, after the decision of the Fed on July 27, with which Powell & Co announced a monetary tightening of 75 basis points for the second. consecutive time, to curb the rush of inflation.
Among the main stories of the day today, Warren Buffett’s decision to reduce his exposure to the title of the Chinese EV giant BYD.
The stock, which was traded on the Hong Kong stock exchange, slipped to -12.4% at the beginning of Hong Kong trading, before closing down nearly 8%. In a filing filed with the Hong Kong Stock Exchange, the conglomerate Berkshire Hathaway founded by Buffett announced that it had sold 1.33 million H shares, for an average value of
277.10 Hong Kong dollars per share, for approximately 368.8 million Hong Kong dollars.
The sales reduced Berkshire’s exposure in the Chinese electric car group to 218.7 million shares from the previous 220 million shares. The cut was therefore decidedly contained, from a stake of 20.04% to 19.92%.
However, this is relevant news, both because it relates to the Omaha Oracle – which yesterday turned 92 – and as it pertains to a stock that has flown by over 600% in the last ten years.
In US dollar terms, Buffett had paid $ 232 million in 2008 to purchase the stake, which is now worth approximately $ 7.5 billion.
Among the titles protagonists today on Wall Street focus on
Chewy, which plummeted more than 10% after the US retail pet products company issued a weak outlook on revenue, and HP, which fell 6%, following the publication of a quarterly that highlighted a turnover lower than expected.
Focus also on Bed Bath & Beyond, the US retail company that announced that it has secured a new loan of 500 million dollars, as part of a plan that provides for the closure of shops and the dismissal of employees.
Confirming fears of a US recession that many consider already underway, Bed Bath & Beyond has announced that it will close approximately 150 stores, cutting its workforce by about 20%. The stock sinks by over 23%.
The uncertainty of the US stock market is explained by the fact that the hawkish speech delivered by Fed number one Jerome Powell at the Jackson Hole symposium has not yet been completely taken for granted.
“Equity markets continue to contend with the expectations of central banks that they will keep their foot on the accelerator of the rate hike (to defuse inflation),” commented Brian Martin and Daniel Hynes of ANZ Research in a note reported by the CNBC.
Here is the trend of the main indices of Wall Street in the month of August and since the beginning of the year, according to what is reported by the CNBC.
The Dow Jones lost 3.2% in August, taking a 12.5% loss since the beginning of the year. The index is down 14% from the record of the past 52 weeks.
The S&P 500 lost 3.5% in the month, dropping 16.4% in 2022, and is down 17.3% from the record of the past 52 weeks.
The Nasdaq closed August with a loss of 4.1% and slipped by 24.05% since the beginning of 2022. The list of hi-tech stocks is down 26.7% from the high of the last 52 weeks.
In yesterday’s session, the S&P 500 lost 1.1% to 3,986.16 points, dropping below 4,000 for the first time since July; the Nasdaq Composite was down 1.1% to 11,883.14, and the Dow Jones Industrial Average was back 308.12 points, or nearly 1%, to 31,790.87.