The US market has fallen off the pitch, despite strong results released by the tech stars like Apple and Facebook thanks to weak economic indicators and renewed concerns over Sino-US negotiations. The Nasdaq does not benefit, giving up 0.14% to 8.292 points, against a 0.52% decline of the DJIA to 27.046 points. The S & P500 restores 0.30% to 3.037 points. The dollar index fell 0.3% to 97.30. In the commodities segment, a barrel of WTI crude oil loses 1.3% to $54.10, while North Sea Brent sells close to 1% to $60.
Bloomberg news reports that Chinese officials have doubted the possibility of finding a comprehensive trade deal with the US administration have particularly weighed.
The US Federal Reserve yesterday reduced its rates for the third time of the year, in a range of 1.5% to 1.75%, against 1.75% -2% previously. This decision was widely anticipated. “We believe the current monetary policy stance should remain appropriate as new economic data remains broadly consistent with our outlook,” Fed chief Jerome Powell said at his press conference. Only “a major revaluation of our prospects” could lead the central bank to further reduce rates, added the boss of the US Central Bank, which should cause worry for investors.
The Fed reported Wednesday after a meeting of its Monetary Policy Committee that it would now wait for some time before making any new decision. “The challenge now is how long this period can last,” said Mazen Issa, an analyst for TD Securities. According to him, this will depend on further developments in trade negotiations between China and the United States as well as indicators.
Fed Chairman Jerome Powell said on Wednesday that there should be “a noticeable change” in the Fed’s forecast to change rates, and he dismissed the idea of an imminent rate hike in light of the country’s inflation.
While this message is more or less what market players expected, several data released Thursday revived their concerns about the health of the global economy.
Investors were particularly shaken by the decline in October economic activity in the Chicago area to its lowest level in almost four years, according to the index of purchasing managers of the ISM Association.
They will pay close attention on Friday to the official monthly report on US employment and the ISM index on manufacturing activity across the country.