(Boursier.com) – American ratings are expected to rise before the market on Tuesday, after two painful sessions. The Dow Jones rose sharply 0.6% and the S&P 500 by 0.8%, against a 1.2% increase on the Nasdaq. Last night, the DJIA fell 2.8% and the Nasdaq was 4.7% at the close. U.S. markets remain weakened by fears of accelerated currency restrictions, following extremely worrying U.S. inflation figures (at a 41-year high of 8.6%). On Nymex today, a barrel of WTI crude recovered 1.2% to $ 122.4. An ounce of gold yields 0.5% to $ 1,822. The dollar index returns 0.1% against a basket of currencies. Bitcoin finally unscrewed to $ 22,000.
In bond markets, the yield on the 2-year T-Bond stands at 3.29%, against 3.32% for the 10-year and 3.34% for the 30-year.
The S&P 500 ended last night down nearly 22% compared to its record close of 4,796 pts on Jan. 3, which now puts it in “bear market” territory as the fall exceeded 20%. The index had previously reached “bear market” levels on the day on May 20, but rebounded to that level, rising nearly 10% through June 2. Therefore, it is the first real bear market since the beginning of 2020, when the S&P fell around 34% between Feb. 19 and March 23. The index recovered after less than six months with the help of covid plans and the Fed’s rampant weather forecast.
This time things are much more uncertain. Commentators observing bear markets point to different depths (from nearly 20% to 57% decline seen up to October 2007) and durations. Reuters noticed an average decline of 32.7% for 13 bear markets since 1946, with recoveries lasting between three and 69 months. Some specialists believe the market will find support near the May low of 3800 pts on the S&P. Others cite the risk of a larger correction, such as Morgan Stanley’s Mike Wilson considering the fall to 3400 pts (representing a decrease of 29% compared to January 3).
Operators are now forecasting on a very strong 75 basis point move from the Fed tomorrow night. According to CME Group’s FedWatch tool, the probability of such a rate increase is 91%! The current rate range of fed funds, which can be seen between 0.75 and 1%, will therefore go between 1.5 and 1.75%! The same tool shows that this range could reach 2.25 to 2.5% (almost 87% probability) by the end of the meeting scheduled for the end of July, i.e., a further increase of 75 basis points. score!
The June 14-15 FOMC meeting will be the highest point in terms of macroeconomics this week. Major local brokers, including Goldman Sachs and Morgan Stanley, are therefore now forecasting a very strong move of 75 bp, even though expectations were only 50 bp a few days ago. Regarding the year-end financial conference (which will end on December 14), the FedWatch tool essentially shows forecasts of 3.5-3.75% (40% probability) and 3.75-4% (35% probability) for the range of rate of fed funds.
It is likely that the US central bank will already give a clear indication for September tomorrow. However, the Fed should leave the door open on a move to 50 or 75 bps increases. In addition, Jerome Powell, head of the institution, may explicitly reject the idea of a break from the Fed that was still expected a while ago. Powell could confirm the strength of the labor market and further underline the Fed’s commitment to lower inflation. The June meeting also included an update, which will focus on the expected rate trajectory over the next two years and the “terminal rate”.
The higher -than -expected U.S. consumer price index has re -ignited fears of long -term inflation, which will require monetary policy to push further into tight territory and increase the risk of a global recession. According to 70% of academic economists participating in an FT-IGM survey, the United States is expected to enter a recession in 2023. Nearly 40% predict that the recession will occur in the first half of 2023, while a third of specialists believe that it will be delayed until the second semester. The World Bank and the OECD recently lowered their global growth forecasts, along with the World Bank’s warning about stagflation. The IMF also announced that it will lower its forecast for global growth next month. Recession forecasters point to headwinds from the war in Ukraine, energy and food price inflation, rising interest rates and Covid lockdown in China. However, many argue that the recession is preventable, citing low unemployment, strong household and company balances, China’s stimulus power and the belief central banks could pull off a soft landing. . .
The U.S. producer price index for May 2022 rose 0.8% compared to the previous month, according to FactSet consensus. It climbed 10.8% in one year. Excluding food and energy, this indicator is up 0.5% compared to April, against 0.6% consensus and 0.4% last month. The one -year increase, excluding food and energy, was 8.3%, against the 8.7% consensus.
Tomorrow Wednesday, the day will be very active, including U.S. retail sales, the New York Fed’s Empire State index, import and export prices, companies ’inventories and sales, the real estate index estate market, the Atlanta Fed’s inflation expectations index, the The Energy Department’s weekly report on domestic oil stocks, and of course the Fed’s press release and Jerome Powell’s conference.
Oracle. The Austin, Texas-based American group has shown that its approach to moving its offer to the “cloud” is yielding, posting revenues and earnings that exceeded analysts ’expectations for the fourth fiscal quarter. its ending on May 31. However, net income dropped 21% to $ 3.2 billion from $ 4 billion last year. Net earnings per share, adjusted for non -recurring items, came out at $ 1.54, while the FactSet consensus was for $ 1.37. Sales per quarter rose 5% (and 10% at the same exchange rate) to a total of $ 11.8 billion, compared to the $ 11.6 billion Wall Street expected. Total cloud-related sales jumped 19% to $ 2.9 billion (+22% on constant exchange rates).
“We have seen a surge in demand for our cloud infrastructure offering, which has jumped 39% in consistent currency,” Group Chief Executive Safra Catz said in a statement. “We believe this increase in growth shows that our cloud infrastructure business has entered a phase of hyper-growth,” he added.
Twitter. Elon Musk is due to address all employees of the social media network on Thursday Twitter for the first time since he unveiled his initial plan to buy back 44 billion dollars, Reuters found out yesterday on Monday, from a source familiar with the matter. Business Insider, citing an email message from Twitter CEO Parag Agrawal, also reported on the meeting on June 16. Agrawal said, in his message, that staff can submit their questions to the trader in advance. The marketing director of the social network, Leslie Berland, will act as moderator during the event …
Recall that Musk first proposed to buy Twitter for 44 billion dollars, before suspending his proposal to get more data from the group about analyzing fake and bot accounts. Markets are betting on a reduced offer from Musk, as Twitter’s share price moves to $ 37, a far cry from the $ 54.2 indicated when the billionaire approached in April.
Coinbase has just announced a major restructuring plan, involving the removal of 18% of its workers, or 110 positions. The group is producing economic change, while cryptocurrencies have also largely been unscrewed. The cryptocurrency exchange platform has lost 85% of its value since its debut on Wall Street. Most of the fall occurred this year, with the collapse in Nasdaq technology stocks. “Right now, I’m making the difficult decision to reduce our team size by approximately 18%, to make sure we stay healthy during this economic downturn,” said Brian Armstrong, chief executive and co-founder of the group.
Apple. The German Cartel Office has announced that it is investigating the rules imposed by the group on publishers of third-party applications in terms of tracking user data.
Boeing somewhat rising before the stock market on Tuesday on Wall Street, after losing 8.8% yesterday. Industry -wide demand for aircraft will be strong and continue to improve as airlines work to replace aging fleets, buy better models and watch the number of passengers grow, Boeing said yesterday. Chief Executive Dave Calhoun, expressing great optimism. “The demand for the planes is as strong as I’ve seen. I think it’s going to grow,” Calhoun told Reuters and another outlet on the sideline of an event at Boeing’s new headquarters. in Arlington.