Dow falls on Fed warning

Dow Jones declines as Fed warns about its next steps

The Dow Jones closed at 33,342, down 0.23%. The S&P 500 edged up 0.06% to 4,156, while the NASDAQ 100 rose 0.11% to 12,516.

Major market indices closed with gains of over one per cent yesterday on some optimism shown around the debt ceiling talks. The rise in prices of some regional US banks also had an effect, after it was learned that Western Alliance Bancorp, one of the investors asked by investors since the crisis of banking confidence in the United States, reported a sharp increase in its deposits. had experienced. close to the first quarter.

In the macroeconomic section, New York investors had breakfast with TODAY Data for initial jobless claims, which fell 22,000 to 242,000 in the week ended May 6, The market had expected a reading of 255,000 after last week’s 264,000, raising hopes that the job market is cooling off, as the Fed wants.

Added to this are statements by Dallas Fed President, Laurie Logan, cautioning that the latest data does not advocate a pause in rate hikes at the institution’s next meeting on June 14., “After raising the target range for the federal funds rate at each of the last 10 meetings of the Federal Open Market Committee, we have made some progress,” he said in a prepared speech in San Antonio. “Data over the next few weeks may still show that it is appropriate to skip the meeting. However, as of today, we have not yet reached that point.

CME Group’s FedWatch indicator, which measures prices in the federal funds futures market, projects a 26 percent hike at the June meeting to 0.25 percent, though odds have been rising over the past day.

In other benchmarks, the Philadelphia Federal Reserve’s manufacturing index for the sector rose to -10.4, an increase of 29 percentage points and better than the -20 estimate. However, the index, which measures the percentage of companies reporting expansion versus contraction, continued to decline in the sector in the quarter. The sales of existing homes for the month of April will also be known throughout the morning.

Meanwhile, investors are eyeing the continuation Negotiations taking place in the United States with the aim of reaching an agreement that allows the debt ceiling to be raised before the start of June, thus allowing the US Treasury to meet its payment commitments.

“we hope that Any positive news on the progress of the above talks is welcomed by the investorsWhile there is any indication that the parties are still not reaching positions, the behavior of western risk assets, especially equities, will be punished,” he says. Juan J. Fernandez-Figueres, Link to Gasteone,

“Given the high level of uncertainty that this issue is generating, we anticipate that many investors will prefer to remain on the sidelines of the stock markets while waiting for a final resolution, which will once again be felt in activity in the markets.” Which will keep coming down”, continues the analyst.

There is moderate optimism about the possibility of the two sides reaching an agreement soon, an optimism confirmed by President Biden, who said the latest talks with Republicans were “productive and direct”, at the same time as he is of the opinion that “Unprecedented default” of the United States.

For his part, the Republican leader in the lower house of Congress, Kevin McCarthy, confirmed that although the terms are still coming, he does not believe the country will default, and that “it is possible to reach an agreement before then.” ” at the end of the week.”

On the corporate front, shares of Take-Two Interactive Software were up 10.7% at the open on Thursday, according to Refinitiv, after the video game company posted fiscal fourth-quarter adjusted revenue of $1.39 billion, beating analysts’ estimates of $1.34 billion. was higher than expected. On the other hand, the company’s estimates for the first quarter and full year missed Wall Street’s expectations.

Shares of Cisco Systems, in contrast, are down nearly 4%, despite the company posting higher profit and revenue than it did for the fiscal third quarter. Cisco posted adjusted earnings of $1 per share and revenue of $14.57 billion. Analysts had expected earnings of 97 cents per share and revenue of $14.39 billion.

The great hero, though, is Walmart, the true measure of consumption in America. The retail giant rose just over 1.3% since its debut. Raise its full-year guidance after fiscal first quarter sales grew nearly 8% That’s because its larger grocery business helped offset weaker sales of clothing and electronics.

The company expects consolidated net sales to increase by approximately 3.5% in the fiscal year, while adjusted earnings per share will be between $6.10 and $6.20. In the first quarter, Walmart reported earnings per share of $1.47, which exceeded expectations of $1.32. Revenue increased to $152.3 billion compared to the expected $148.76 billion.

New York-listed Alibaba shares rose 1.07%. The Chinese e-commerce giant posted a net profit of 72,509 million yuan (9,545 million euros) in its 2022-2023 fiscal year, up 17% from the previous year. Revenue rose 2% to 868,687 million yuan (114,347 million euros), falling short of expectations. The company has also announced that it plans to take its cloud business public.

During earnings season, Micron Technology soared 2% after it learned it plans to invest a multibillion-dollar investment in Japan to boost the country’s production of dynamic random access memory chips.

In the commodity market, a barrel of West Texas crude fell 0.64% to close at $72.50. A barrel of Brent oil also saw a similar decline, yielding 0.60% and closing at $76.61.

Talking about fixed income, the yield on the 10-year bond has remained stable at 3.591%. On the 2-year bond, the yield declined by one basis point to 4.165%.

The euro loses 0.21% against the dollar, setting an exchange rate of $1.08423 for each Community currency.