Wall Street begins the month of October with optimism, also spurred by the news of the anti-Covid pill produced by Merck. A few minutes into the session, however, the note from Fitch arrives, warning that the policy of the US debt ceiling could jeopardize the triple A rating of the United States.
The agency writes that the flop of attempts by Congress to suspend the limit placed on US debt confirms a deadlock that may be among the longest since 2013. That said, Fitch believes that the ceiling on US debt will eventually be raised or suspended. in time to avoid a default.
US stock indices drift, the Dow Jones reduces early gains, the S&P and Nasdaq turn red. After the Italian 16 hours, the Dow Jones remains solid with a gain of over 130 points (+ 0.40%), at around 33,967 points; the S&P is now up by 0.10% with a change of + 0.10%, while the Nasdaq drops 0.30% to 14.403.
Among the stocks Merck remains the protagonist, with a rally of more than + 9% on the Dow Jones: the American pharmaceutical giant has announced that the anti-viral drug produced together with Ridgeback Biotherapeutics, as a treatment for Covid-19 disease, has reduced the risk 50% hospitalization or death for mildly or moderately ill patients. The two companies will ask the competent authorities for emergency authorization for the use of the drug.
The US stock market leaves behind a month that has confirmed its reputation.
In September, known to be the worst of the year for the US stock market, the S&P 500 lost 4.8%, the Dow Jones fell 4.3% and the Nasdaq Composite fell by 5%. 3%: All three equity indices suffered the strongest falls of the year.
In particular, the S&P 500 interrupted a bullish cycle that lasted a good seven months, taking the strongest loss, in September, since the one suffered in the month in which the alarm bell of the Covid-19 pandemic rang out around the world. , i.e. from March 2020.
“Slowing growth, less accommodative monetary policy, China’s woes, easing fiscal stimulus, persistent supply chain bottlenecks are all factors that have conspired against investor sentiment,” he commented in a reported statement. from CNBC Chris Hussey, managing director of Goldman Sachs.
Ten of the 11 sub-index sectors of the S&P 500 closed September in the red, led by the -7.4% collapse of material stocks, i.e. those companies that process and work in general raw materials, including those focused on exploration and processing of commodities.
The best sector was the energy sector, which flew by more than 9% in the month, in the wake of the Global Energy Crunch.
Positive effect of interest rates on Treasuries, which fall below the 1.50% threshold.
From the macroeconomic front, the report on consumer spending and personal income was published, which also contains the inflation parameter most monitored by the Fed to make monetary policy choices: it is the price index of personal spending for core consumption which,
in August, it was up 3.6% on an annual basis, as expected and as in the previous month. On a monthly basis, the increase was + 0.3%, also in this case as expected and as in July.
The overall index, therefore including the prices of energy and food goods, grew by 4.3%, more than the previous 4.2%.
With regard to the other macro data disclosed, personal income fell by 0.2%, making it worse than the growth of + 0.3% expected and slowing down compared to the previous increase of 1.1%.
Consumer spending rose by 0.8%, outperforming the estimated + 0.6% and the previous + 0.3%.