(News Bulletin 247) – The 1st week of September begins on Wall Street (Monday was a public holiday) on a slightly negative note: the Nasdaq yields -0.08% (to 14,020), the S&P500 yields -0.42% and the Dow Jones -0.56%.
But the Nasdaq-100 floats +0.11% at 15,508 in the wake of Microsoft +1.5%, Netflix +2.2%, Tesla +4.7%, Airb-n’B +7.2%.
The S&P500 was dragged down by property developers and home builders: Lennar -4.8%, DR-Horton -5%, Pulte group -5.8%, Beazer Homes -6.4%, MDC -7.2 %.
The deterioration of the bond market clearly weighed on this sector which is very exposed to interest rates, the tension of the T-Bonds of +8Ps towards 4.26% being caused by the surge in oil on the ‘WTI’ (which reached $87 ) while Arabia maintains the reduction of its quota (-1 million barrels/day) until the end of 2023, and Russia also reduces its exports.
The White House intended to replenish strategic oil stocks at around $70 this year (350 million barrels to be restocked): the current price is 24% beyond this target… and Saudi Arabia seems to be aiming to prevent any consolidation under $80.
The US bond markets are deteriorating in the face of the underlying inflationary risk (the gallon of fuel has gone back over the $4 mark on average in 80% of the States of the Union), thus continuing the correction which has been going on for 6 weeks. Significant fact, all maturities greater than ‘2 years’ take +8Pts: the ‘5 years’ and the ’30 years’ are on an equal footing, rising this Tuesday from 4.29% to 4.37%!
This does not impress Goldman Sachs which reduces its estimate of the risk of recession at the end of 2023 to only 15% against 20%.
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