Wall Street: After six falls, a timid recovery takes shape

(CercleFinance.com) – Wall Street was set to outline a timid recovery on Tuesday morning, fueled by a pair of buybacks after six sessions of declines, although the market could be erratic in the absence of drivers.

Half an hour before the open, the ‘futures’ contract on the S&P 500 index is up more than 0.1%, while on the Nasdaq 100 it is not far from 0.4%, suggesting a small recovery at the open.

The Dow Jones has just posted six consecutive sessions in the red, a bearish streak that has seen it fall more than 2% since Thursday, June 15.

It is true that the latest indicators are seriously signaling the possibility of an impending recession, although it remains difficult to estimate the timing and, above all, the intensity.

At the same time, investors continue to wonder about the prospect of further rate hikes from the Fed, raising fears of possible overzealousness in its fight against inflation.

“Markets are starting to estimate that interest rates will remain high for longer and yield curves are appearing increasingly inverted, creating a delicate environment for equities,” said one at Pictet Wealth Management.

In terms of indicators, this morning the Commerce Department reported a 1.7% increase in US durable goods orders last month, following a 1.2% increase in April.

Still, excluding transportation equipment, where orders rose 3.9% month-on-month, U.S. durable goods orders rose just 0.6% in May.

In short, this news does not seem encouraging enough to really increase investors’ risk appetite.

Today’s session should therefore remain flat, and the trend is likely to remain hesitant until the release on Friday of the price index linked to personal consumption expenditures (PCE), which remains the Fed’s preferred measure of inflation.

Otherwise, the day will be marked by the publication, later in the morning, of the Conference Board’s consumer confidence index and new home sales.

Along with the slight recovery looming in stocks, US Treasury yields rose on Tuesday as the dollar weakened, appearing to signal less risk aversion.

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