The New York Dow Jones Stock Exchange closed on Thursday (January 19) as investors worried that strong US labor data would push the Federal Reserve to raise interest rates aggressively. This will lead to the economy facing recession.
The Dow Jones Industrial Average closed at 33,044.56 points, down 252.40 points, or -0.76%, the S&P 500 closed at 3,898.85 points, down 30.01 points, or -0.76%, and the Nasdaq Index closed at 10,851.7, or -24. 0.96%.
The Labor Department reported that initial claims for unemployment benefits fell by 15,000 to a seasonally adjusted 190,000 last week. That defied analysts’ expectations for a rise of 214,000, well below the pre-COVID-19 weekly average of 215,000 in the US, indicating the market was stagnant. Although the Fed tried to tighten monetary policy to slow down the heat in the labor market.
Fed officials including St Louis Fed President James Bullard, Cleveland Fed President Loretta Mester and Boston Fed President Susan Collins They came out to support the Fed raising interest rates to above 5% in order to pull inflation back to the target.
Most recently, Mr. Jamie Dimon, CEO of JPMorgan Chase Bank, at the World Economic Forum (WEF) in Davos yesterday that He expects Fed interest rates to bounce above 5% as core inflation remains high.
Regarding the policy interest rate forecast (Dot Plot) at the last Fed meeting in December 2022 Fed officials expect to continue raising interest rates in 2023 and not cut them until 2024, with the Fed raising rates so high with 5.1% in 2023 before the cycle ends. This is the highest level since December 2007.
Eight of the 11 stocks that make up the S & P500 closed in negative territory, led by industrial stocks down 2.08 percent, with Boeing shares down 1.11 percent, Catherine Pillar shares down 2.33 percent, fell General Electric (GE) shares fell 3.04%, 3M shares fell 3.52 %.
The energy stock index rebounded 1.11% after WTI oil gained more than 1% overnight, with Conoco Phillips up 1.03%, Exxon Mobil stock gaining 0.64%, and Chevron stocks adding 0.64% up 1.08%
Shares of Procter & Gamble (P&G) fell 2.11% after the company reported a drop in earnings in the period October-December 2022. P&G’s earnings were $3.9 billion, or $1.59/share, down from $4.22 billion, or $1.66/ share in the same period in 2021.
Netflix stock fell 3.23% before the company released results, however, after the market closed. Netflix shares rose more than 3% after the company announced global subscriber growth in the fourth quarter of 2022.
For US economic data reported last night. The Philadelphia branch of the Federal Reserve Bank (Fed). Mid-Atlantic Manufacturing Index Released It rose to -8.9 in January and beat analysts’ expectations of -10.0 from -13.7 in December.
However, the index fell below 0, indicating that the manufacturing sector in the Mid-Atlantic region is still contracting. shrinking for the fifth consecutive month