August 14, 2022

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DNB Markets: - Investors are intimidated

DNB Markets: – Investors are intimidated

Monday has long been marked by a positive development in global stock exchanges. Low expectations of Fed increases set the stage for a positive day in the stock market, and the mood on the New York Stock Exchange was good until Apple appeared on the scene.

Recession fears

“It’s hard to say if the market needs a peg to put a hold on recession fears, but soon after Dagsrevyen started, Bloomberg released news that some departments at Apple would stop hiring. Normally, hiring at the company increases by 5-10 percent, But according to Bloomberg, the company will now put itself on somewhat more difficult times,” chief economist Oddmund Berg wrote in a report from DNB Markets.

The news sent Apple shares down more than 2 percent while the S&P 500, Dow Jones and Nasdaq fell 0.7-0.8 percent.

psychology

From a holistic perspective, Berg thinks it seems somewhat odd that a single company would be able to change sentiment and dictate overall development in this way.

“In that sense, yesterday was a good reminder that stock markets are driven by psychology, and with a drop of about 20 percent so far this year, as well as the prospect of a rate hike, it’s no wonder investors are spooked by signs that we should get a cover in Growth at the top,” Berg writes.

DNB Markets confirms that we are in the period of company reporting and the Federal Reserve’s blackout ahead of the monetary policy meeting later in July. Speculation will continue about what the US Federal Reserve will do, but in the absence of specific data from Fed members, it may appear that corporate earnings and additional plans will have a greater focus and impact.

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The chief economist wrote: “The fear of recession has already taken hold, and all the information that has been added is being used to assess whether or not a decline in growth is becoming likely.”