The New York stock exchanges closed the trading session this Friday, the 22nd, lower and had significant losses in a week that consolidated the narrative that some of the main central banks on the planet will have to maintain high interest rates for a long time horizon. .
The Dow Jones index ended the day down 0.31%, at 33,963.84 points. The S&P 500 dropped 0.23%, to 4,320.06 points; and the Nasdaq fell by 0.09%, to 13,211.81 points. In the weekly comparison, there was a decline of 1.89%, 2.93% and 3.62%, respectively. S&P 500 and Nasdaq had the biggest weekly retractions since March this year.
Among automakers, Ford’s stock rose 1.89%, after the company was spared from a new strike effort by the United Auto Workers (UAW) union that hit Stellantis (+0.16%) and General Motors (-0. 38%). Tesla, in turn, fell 4.17%, after analyst Jeff Chung, from Citi, reported that sales in China fell in September.
At the macroeconomic level, investors remain alert regarding the impact of the interest rate scenario on activity. The US composite Purchasing Managers Index (PMI) fell to 50.1 in the September preliminary, still in expansion territory, according to S&P Global reported today.
Faced with this scenario, the Federal Reserve (Fed) chose to maintain interest rates last Wednesday, but left the door open for a possible new tightening. In a speech today, Fed Director Michelle Bowman said persistent resilience argued for more rate hikes ahead, especially if progress on inflation stalls. The president of the American BC district in San Francisco, Mary Daly, avoided ruling out new elevations ahead.
Overall, Oxford Economics understands that the Fed is looking to solidify the message that rates will stay high for a long period of time. “Leaders consider that the neutral level of interest rates, at least in the short term, is significantly higher than before the pandemic”, he states.
Shares in the banking sector were particularly penalized in today’s trading session. Goldman Sachs dropped 0.71%, Citi dropped 1.89%, Morgan Stanley dropped 1.87%.
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