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Strong declines in America. Dow Jones lost nearly 3%.

Mocne spadki w Ameryce. Dow Jones stracił prawie 3%

2022-04-22 22:10

2022-04-22 22:10

Strong declines in America.  Dow Jones lost nearly 3%.
Photo: Bianca Otero/ / Zuma Press

Friday’s session on Wall Street saw more than 2% of the major indexes fall. Investors adjust stock valuations in a world where US government bonds offer 3%.

These were the worst declines since March 7, when concerns about the situation in Ukraine increased further in financial markets. On Friday, the S&P500 fell 2.77%, ending the day at 4,271.78 points. The Nasdaq fell 2.55%, ending at 12,839.29 points. The Dow Jones index was after a loss of 2.82% at the level of 33811.40 points. In the case of DJIA, this was the strongest decline by October 28, 2020.

The second session in a row was very low. For the entire week, the Dow Jones Industrial Average is down 1.9%, the S&P500 is down 2.8% and the Nasdaq is down 3.8%.

There was no new leading information on the market. It seems that the market has just gotten used to the ever-higher interest rates in the US and is simply adjusting the exorbitant valuation of the stock to the new discount rates. It’s hard for such an increase in Treasury yields to go unnoticed. The repayment of US 10-year debt is approximately 3%, while at the beginning of March it was 1.7% and at the beginning of January it was 1.5%. So change is important.

Financial markets are preparing because the Federal Reserve will raise interest rates by 50 basis points in early May. Or up to 75 basis points right away. By the end of the year, the federal funds rate is expected to be in the 2.75-3.25% range, according to FedWatch tool calculations. This is 25 basis points. Higher than estimated last week.

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So far, the companies’ results for the first quarter haven’t been impressive either. Gap Inc. took an 18% discount on Friday after the apparel company slashed its quarterly sales forecast. Verizon Communications’ valuation fell more than 5% as the communications disappointed with its full-year earnings forecast. The real accumulation of results will not take place until next week, when the quarterly reports will show, among other things, Meta platforms (such as Facebook), Apple, Amazon, Microsoft or the owner of Google, such as Alphabet.


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