February 3, 2023

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US stock markets fell significantly

US stock markets fell significantly

Investors are eagerly awaiting the announcement of the new interest rate from the US Central Bank next week. A nervous market opened lower on Monday, and three major US stock indexes headed down from 1.5 to 2.1 percent two hours before the end of the trading day. They also stayed there for the rest of the day, finally finishing:

  • With a decrease of 1.79 percent for the S&P 500 index.
  • The Dow Jones index fell by 1.40 percent.
  • The Nasdaq Composite Index fell 1.93 percent.

Tesla shares fall

Tesla shares fell five percent when the stock market opened Monday afternoon, following rumors that the company would cut production at its Shanghai plant. Although the representative of the company tried to deny the rumors Reutersthe share fell 6.4 percent.

The US ISM Index was published on Monday afternoon Norwegian time, the index that measures US purchasing managers’ expectations, for non-industry sectors.

The US Purchasing Managers’ (ISM) expectations for the services sector came in at 56.5 percent in November, compared to 54.4 percent in the previous month. Advance, the indicator was expected by 53.3 percent, according to Trading Economics.

The high number for November creates more anxiety for investors, who now fear that the Fed will continue to raise interest rates further, CNBC writes.

US industrial demand also ended in November higher than expected on a month-to-month basis in October, with an increase of 0.8 percent, according to figures from US statistical authorities. In advance, industrial orders were expected to rise 0.7 percent, according to consensus forecasts from Trading Economics.

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Later this week, the University of Michigan’s Monthly Consumer Sentiment Survey for November will be published. Consumer confidence provides an indication of household inflation expectations.

In the Handelsbanken morning report on Monday, economists wrote that inflation expectations among households are the ones to watch out for.

– It is the long-term outlook in particular that has been confirmed by the Fed, and here we have seen a new high recently. Thus, the worst pressure on prices may be behind us, but at the same time there is a possibility that inflation will remain well above target for a long time to come, Handelsbanken economists wrote in the morning report.

Waiting for the final interest rate of the year to be determined

There are only nine days until Central Bank Governor Jerome Powell and the Federal Reserve make their final interest rate announcement of the year, on December 14th.

There, the central bank is expected to cut the rate slightly, after four consecutive increases of 0.75 percentage points, and there The latest increase came at the beginning of November. Indeed, Powell stated last week that the time for “rate-setting moderation” may be imminent.

On Thursday of last week, figures for personal consumption expenditures, the Fed’s preferred measure of inflation, showed just that US inflation in October was 6 per cent. But the day before the Fed’s next interest rate decision, another US inflation number will be released.

Prior to the Fed’s latest interest rate announcement, the key rate ranged between 3.75 and 4 percent.(Conditions)Copyright Dagens Næringsliv AS and/or our suppliers. We’d like you to share our statuses using links that lead directly to our pages. Reproduction or other use of all or part of the Content may be made only with written permission or as permitted by law. For additional terms look here.

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