On Wall Street, a mixed trend for the main US stock indexes. At 15.36 Italian time, the Dow Jones is flat with a change of +0.09%, the S&P 500 retreats by 0.40% and the Nasdaq falls by 0.61%.
Rates on 10-year US Treasuries make an about-face and fall to 3.773% while those on two years remain slightly higher, at 4.529%. Also pay attention to the US dollar: the US Dollar Index has fallen by 3.36% since the beginning of November and is preparing to end the worst month since July 2020, when it suffered a decline of 4.15%.
Wall Street is preparing to enter the week of Thanksgiving, which this year is celebrated in the United States on Thursday 24 November: on that day, the US stock exchange will remain closed, to then reopen the following day, therefore on Black Friday, and close early at 1 pm New York time.
The rally that Wall Street achieved after the publication, last November 10, of the inflation data measured by the consumer price index (CPI) of the United States is flaring up.
The slowdown in inflationary pressures, highlighted by the indicator, had made traders hope for a less aggressive Fed in the path of rate hikes. But some statements from some Fed officials themselves have dashed hopes of a less hawkish US central bank.
In particular, St Louis Fed President James Bullard said that “rates are not yet in an area where they can be considered sufficiently restrictive” and that “an appropriate level of fed funds rates would be between 5% and 7%”, therefore at a much higher level than the markets are pricing.
The latest US inflation macro data had fueled hopes of less monetary tightening than the 75 basis point rate hikes Jerome Powell’s Fed has enacted four consecutive times.
A note that contributes to the negative sentiment on Wall Street came from the strategists of Goldman Sachs: according to the experts of the US banking giant, the phase of the bear market has not yet ended.
“The conditions that are usually consistent with a stock market bottoming have not yet been met,” wrote the strategists of the US banking giant, including the names of Peter Oppenheimer and Sharon Bell.
For the Goldman Sachs team, the conditions necessary for any sustainable equity market recovery are seen as peak interest rates and lower-than-current valuations, reflecting the onset of a recession.
In practical terms, Goldman Sachs strategists expect the S&P 500 to end 2023 at 4,000 points (just 0.9% higher than last Friday’s close), while the end-2023 target for the European stock market Stoxx Europe 600 was set at a level approximately 4% higher than the current levels, around 450 points.
Among the stocks traded in the pre-market on Wall Street, focus on Disney, an exception stock in today’s session which jumps up to +9% in the pre-market after the news relating to the return of Bob Iger as number one of the US entertainment giant effective immediately, replacing Bob Chapek.
In a late Sunday announcement, Disney said it had reappointed Iger as CEO, effective immediately, after criticisms that scuttled Iger’s hand-picked successor as CEO, Bob Chapek, over the multinational’s management.
The news comes 11 months after Iger left Disney, and just days after Chapek said he plans to cut costs at the company, which has been saddled with the rising costs of its streaming service, Disney+.