(New York) The New York Stock Exchange ended a negative week at half-mast on Friday, weighed down by high bond yields and geopolitical risks ahead of the weekend.
The Dow Jones index fell 0.86% to 33,127.28 points, the technology-heavy NASDAQ fell 1.53% to 12,983.81 points and the broader S index
Yields on 10-year Treasury notes briefly touched 5% in post-hours trading Thursday evening, the highest since July 2007. By 4:30 p.m. ET on Friday, they were steady at 4.91 %.
“Investors do not want to take risks before the weekend while tensions remain high” in the Middle East on the 14th day of the war between Israel and Palestinian Hamas, said Jack Ablin, specialist in investment strategy, at Cresset.
“While we are facing a wall of concerns, investors have shown little appetite to go beyond this wall in recent sessions,” commented Schwab analysts.
The ounce of gold, the safe haven par excellence, gained 0.56% to $1,991.60, after climbing during the session to a five-month high, just above $2,000 per ounce.
“Gold is doing well in this risk-averse environment,” underlined Jack Ablin for AFP.
Among the indicators, the American government revealed the annual budget deficit of the federal state which soared to 1,700 billion dollars for the 2023 fiscal year ending September 30.
The deficit thus widens by 23% due to a reduction in tax revenue, but also an increase in debt service, due to the rise in rates.
The massive issuance of new government bonds to repay the maturities of a still large deficit is often cited as one of the factors in the rise in yields on Treasury bills.
Investors also continued to weigh the words of Jerome Powell, the president of the American central bank (Fed), who on Thursday gave food for thought to both hawks and doves, “that is to say for the supporters of high rates like those of a more flexible monetary policy.
“He stressed that it was imperative to return to sustainable inflation and that the road to get there would be long and unpredictable,” summarized Wells Fargo analysts.
As for company results, the general impression is mixed. “Companies manage to beat forecasts on their results, but not on their turnover,” noted Jack Ablin of Cresset.
“The growth in activity is not there. This is not a good recipe for profit expansion,” the analyst said.
On the value side, Tesla continued its fall (-3.69% to $211.99), dragging the NASDAQ down. The stock of Elon Musk’s group has fallen by almost 16% since the start of the week, due to disappointing quarterly results.
During an audio conference, Elon Musk also blamed at length the rise in interest rates which increases his production costs and hampers credit purchases of his vehicles.
The stocks of other electric vehicle manufacturers were dragged into the red such as Rivian (-2.56%) or Lucid (-1.38%).
American Express, a Dow Jones heavyweight, lost 5.38% to $141.57 despite better-than-expected quarterly results. The group reported continued growth in consumer credit spending.
Solar energy stocks had a bad day, led by Israel-based SolarEdge Technologies (-27.27% to $82.90). He indicated that he was facing a slowdown in the equipment installation market in Europe.
Other companies in the sector plunged like Enphase Energy (-14.68%) or Sunpower (-8.62%).
The Toronto Stock Exchange lost more than 1% on Friday, weighed down in particular by losses in the financial, telecommunications and base metals sectors, while the major American indices also fell.
The composite index S
In the currency market, the Canadian dollar traded at an average rate of 73.02 US cents, up from 72.91 US cents on Thursday.
