The US stock market failed to consolidate on the positive territory and finished the trading on Wednesday, June 22 with insignificant negative changes. At the same time, the market managed to completely offset the negative sentiment of futures on major indices during the European session.
As a result, the main US stock benchmark Dow Jones Industrial lost 0.15%, technology sector indicator Nasdaq ended the trading with similar indicators, and the broad market index S & P 500 was down by 13 hundredths.
Investors who expected new comments on the U.S. economic condition from the head of the Federal Reserve System got their own. Exactly the confident rhetoric of Jerome Powell did not let American stock exchanges close in the deep red, in which the futures market was before the major trading opening.
Jerome Powell supported the U.S. stock market
The Federal Reserve Chairman once again reaffirmed the firmness of his intentions to fully curb the record inflation rate over the past four decades. The regulator is ready to continue its tight monetary policy until it sees “convincing evidence that it is on the decline.
Jerome Powell saved the Dow Jones, but traders need stronger drivers for growth. Photo: Yandex
Yet he was forced to admit that achieving a so-called soft landing for an economy without a recession has become “a much more difficult task. Powell’s office raised rates by 75 percentage points last week, and hinted at another such monetary round at the next meeting.
This finally convinced investors that the Fed is sacrificing the fight to prevent a recession in favor of the battle against inflation. Consequently, recession expectations of economists at leading banks and investment houses have skyrocketed in recent days and continue to rise.
Strategists at Citigroup raised their expectations of recession probability up to 50%, and Goldman Sachs cut its forecasts for the US GDP in this connection. Meanwhile, fans of unbridled optimism are alive and well. For example, the bankers at UBS in Switzerland expect neither a global recession, nor its manifestation in the U.S. economy. Here’s where the stamina is!
Pharmacists in the leaders of the Dow Jones
The main demand came to the shares of pharmacists and biotechnologists. UnitedHealth (UTH) +1.95%, Johnson & Johnson (JNJ) +1.57%, Procter & Gamble (PG) +1.56%, McDonalds (MCD) +1.44% and Merck (MRK) +1.28% led the DJI. While heavy construction equipment maker Caterpillar (CAT) -4.349% and oil and gas giant Chevron (CVX) -4.347% were the outsiders of the trading session.
In Nasdaq the positive tone was set by Moderna (MRNA) +4.68%. The remarkable note about this stock was published on Motley Fool. In the article the author unambiguously hints on the harmfulness of purchases, as well as averaging of positions in the strongly fallen securities.
The fact that he mentions Buffett’s advice is not bad, but why he chose this particular biotech for his example is not quite clear to me. Especially against the background of the fact that Moderna technically “trampled” the triple bottom on the semiannual chart, and is potentially ready to go into the pullback. And taking into account the worked downside of 75% it can be quite effective.
volatile “saw” in the oil industry continues
The volatile slide in oil stocks continues. It all started last week when oil and gas stocks took a nosedive and substantially corrected amid a drop in oil prices.
On Tuesday, after the pullback of the black gold, the securities of oil companies were in the leaders of growth, and on Wednesday, the energy sector, following oil, again became a performer within the S&P index with the result of minus 4.2%. Shares of ExxonMobil (XOM), the biggest oil businessman in the U.S. dropped 3.96%, Chevron (CVX) lost 4.35% of its capitalization, and ConocoPhillips (COP) and EOG Resources (EOG) plummeted nearly 6%.
On Wednesday, U.S. President Joe Biden launched his campaign to save Americans from catastrophic increases in motor fuel prices. He brought before Congress a three-month suspension of the federal gasoline tax.
Whether or not lawmakers ultimately back his proposal, which may not happen because of the divided Republican base, he could still score some political points on the eve of the U.S. election.
On June 23 the focus of the issue will shift to the meeting of the head of the US Energy Department Jennifer Granholm with the heads of the oil refining corporations, after which the final statements of the parties, the results of which will guide the investors in the energy securities, are quite probable.