Wall Street had a rocky start to the week

Oil prices are collapsing
Wall Street had a rocky start to the week

07/05/2022, 10:30 p.m.

It’s not just concerns about rising interest rates that continue to weigh on Wall Street. Investors are also worried about fears of an energy crisis in Europe. The euro falls to its lowest level in almost 20 years. Oil prices are clearly under pressure.

Amid the tension between fears of a recession and the sharp drop in oil prices, things were choppy on US stock markets. A very weak start was followed by a strong recovery, driven by technology and growth stocks, considered to be particularly sensitive to interest rates. The triggers for the recovery were market interest rates which continued to fall significantly, the very strong dollar and the collapse in oil prices, which reduced inflation fears and therefore expectations of rate hikes. of interest.

However, fears persisted that the US Federal Reserve’s rate hikes to curb inflation could lead to a recession. Added to this is the fear of an energy crisis in Europe, also with potentially fatal consequences for the economy. That US President Joe Biden is considering reducing some of the trade tariffs imposed on China by his predecessor Donald Trump has been largely ignored.

Of the Dow Jones index lost 0.4% to 30,968 points. At the low, it was over 600 points lower. For the S&P500 was up 0.2%, heavy tech Nasdaq indices even turned significantly into positive territory and rose up to 1.7 percent. According to initial reports, there were 1,394 (Friday: 2,412) winners and 1,861 (828) losers on the Nyse. 122 (87) titles closed unchanged.

The US 10-year yield fell another 7 basis points to 2.82%, just below the 2-year yield in what is seen as a sign of recession. In mid-June, it was already close to 3.50%. Bonds were sought after as a so-called safer haven and also with speculation that the US Federal Reserve could rein in interest rate hikes given growing signs of an economic slowdown. Meanwhile, US orders in May were significantly better than expected.

Gold at annual low

Of the dollar against the euro at its highest level for 20 years. While this tends to work against exporters, it does help lower inflation in the United States. Of the euro fell 1.6% to $1.0260.

On the one hand, the energy crisis in Europe weighed on the euro and, on the other hand, the fact that the ECB only announced its first and only small rate hike for the month of July, while the US central bank has long turned interest rates and continues to do so. However, the dollar also proved to be very strong compared to other currencies (dollar index +1.3%) because it was also sought after in its function as a safe haven in an environment characterized by great uncertainty.

the Oil prices collapsed on worries about the economy and the strength of the dollar. They fell about 10% at the top and marked the lowest levels since mid-May. Another reason given by market participants was that oil production in the United States is likely to increase after the Supreme Court has just stripped the Environmental Protection Agency of some of its control over new production sites.

Of the gold price fell sharply by 2.3% and reached a low for the year during the year. It was weighed down by the strength of the dollar and the prospect of higher interest rates. Analyst Chintan Karnani of Insignia Consultants spoke of a technical slump – also for silver and copper – aggravated by recession fears and faster rate hikes by various central banks.

The Curevac vs. Biontech lawsuit in brief

On the stock market, energy sector papers were at the end with a minus of 4.0%, followed by utility stocks (-3.4%).

The course of Curevac (-1.1%) was unimpressed by the news that the vaccine maker had lost its intellectual property rights to mRNA technology to a competitor biotech (+2.2%) is injured and therefore wants to be compensated by trial. Modern gained 3.7%. The US vaccine maker is also relying on mRNA technology.

Exxon-Mobile fell 3.1%, though second-quarter profit is expected to hit $18 billion, according to a statement to the U.S. Securities and Exchange Commission. That would be the highest in almost 25 years.

For You’re here was up 2.6%. Over the weekend, news emerged that vehicle deliveries fell for the first time in more than two years from the previous quarter, but rose significantly from a year earlier.