Wall Street anxious in the face of rising interest rates and geopolitical tensions


Wall Street ended down on may 17, 2018 (Photo SPENCER PLATT. GETTY IMAGES NORTH AMERICA)

Wall Street ended down on Thursday, concerned about the rising interest rates and the many elements of geopolitical uncertainties, the commercial relations between the United States and China.

Its index feature, the Dow Jones Industrial Average, has lost 0.22% at 24.713,98 points.

The Nasdaq, in high coloring technology, was down 0.21%, 7.382,47 points.

The expanded index S&P 500 was down 0.09% to 2.720,13 points.

“This decline is not linked to any particular reason, but rather to an uncertainty of widespread on the world trade and interest rates,” says Karl Haeling of LBBW.

The borrowing rate of the United States at age 10 is mounted Thursday until 3,119%, a level unseen since 2011.

What cool some of the investors, the brokers of Wall Street, having greatly benefited from the financial crisis of the rates maintained by the u.s. central bank at a very low level to borrow briskly.

Washington and Beijing have also resumed their delicate trade negotiations under the threat of the possible entry into force in less than a week of u.s. sanctions. And to the question of whether there would be an agreement with China, Donald Trump emphasized that he was “inclined to doubt”.

“Investors also continue to worry about the negotiations with North Korea,” while Pyongyang threatened on Wednesday to cancel the planned summit next month between Kim Jong and Donald Trump if Washington was trying to force her to renounce unilaterally its nuclear arsenal, according to Mr. Haeling.

The higher interest rates and the continuing uncertainty around the commercial relations combined with the continued rise in oil prices are fueling the idea of an increase in inflation and, in turn, “the fear of a possible slowdown in consumer spending,” notes Patrick O’hare of Briefing.

– Small-cap stocks in the form –

In this environment, the Russell 2000 index which covers Wall Street small-cap manages to hold its own in the game and has climbed to a record level.

“In view of the uncertainties on the international trade, sanctions on iran and other points of friction, geopolitical, investors are betting that u.s. growth will exceed that of other countries, and that small businesses will be least affected by possible disruptions, said Mr. Haeling.

The indices have also been fished on Thursday by the acceptance of the quarterly results of a few large companies.

The retail giant Walmart (NYSE:WMT), which announced on Thursday a sharp drop in its net profit in the 1st quarter, mainly due to changes in accounting methods related to acquisitions, fell 1.90%.

Equipment telecom Cisco (NASDAQ:CSCO), whose forecasts have disappointed, has fallen to 3,76%.

The clothing store chain J. C. Penney has fallen 12,38% after having reported a decline in sales of 4.3% in the first quarter of its financial year offset, in particular due to the closure of 141 stores in the second and third quarters of 2017.

The car manufacturer Ford (NYSE:F) climbed 0.53%. The group announced that it would resume as soon as Friday, earlier than expected, the production of his pickup truck F-150, the vehicle most sold in the United States, which had been suspended after a fire at a supplier.

The specialist of the delivery of food at home Blue Apron rose 5.73 per cent after it announced the appointment to the position of chief financial officer of Tim Bensley, who has worked for nearly 30 years at PepsiCo.

CBS (NYSE:CBS), which opposes its merger with Viacom (+1,62%), advocated by the holding company, National Amusement which controls the two entities, was down 4.12%. A judge denied Thursday a decision of the board of directors of CBS to prevent Shari Redstone, who runs National Fun with his father, to intervene in the assessment of the merits of such a merger conducted by a special committee.

The industrial conglomerate United Technologies (NYSE:UTX) climbed 0.43%, while the investor activist Bill Ackman, in a letter supported the idea of a split of the company into three entities (aircraft engines, elevators and air-conditioners) already mentioned by the management.

Leave a Reply