Investors are watching the global energy crisis, the debate over the US debt ceiling, and the US Federal Reserve’s plans to end some of its economic support linked to the pandemic, among other factors.
Volatility continued to disrupt financial markets, with US stocks posting their biggest monthly decline since March 2020.
Shares fell on Thursday even after confirmation that the House passed a nine-week spending bill to avoid a U.S. government shutdown. For traders, this was just one risk in a litany. Investors are also bracing for the Federal Reserve to scale back its stimulus measures amid growing fears over slowing economic growth, high inflation, supply chain bottlenecks, a global energy crisis. and regulatory risks emanating from China.
Political wrangling in Washington threatens to push the United States into default and force President Joe Biden to cut his spending program. Democratic Senator Joe Manchin wants the social spending package cut by more than half to $ 1.5 trillion. House Speaker Nancy Pelosi continued to vote on a bipartisan infrastructure bill, even as Progressive Democrats have said they have the numbers to block it until the Senate kicks off. agreement on a more ambitious set of taxes and expenditures.
âThe old adage, the market is climbing a wall of worry, is not lost on us,â said Tom Mantione, Managing Director of UBS Private Wealth Management. âConcerns about China, the pandemic, the debt ceiling and tax laws currently weigh on investors, but it is important to understand which problems can create structural change and which create short-term volatility that investors can. take advantage. “
The S&P 500 closed at the lowest level since July, extending its September losses to nearly 5%. Economically sensitive companies such as industrials and financials were among the worst performers on Thursday. The slide nearly wiped out the index’s gains for the quarter.
A near-record technical streak for the S&P 500 has raised concerns among some bulls that a sharp pullback is expected.
âThe S&P 500 has now passed its 200-day moving average by an incredible 317 trading days, one of the longest streaks of all time,â said Ryan Detrick, chief market strategist at LPL Financial. “What we end up with is that a 5-7% pullback could occur at any time given that we haven’t had one for so long.”
Elsewhere, oil ended the month up nearly 10% after a tumultuous session in which China reportedly ordered its major energy companies to secure energy supplies at all costs in the event of a shortage, which has prompted the White House to reiterate its own concerns about rising prices.
Here are some events to watch this week:
- Univ. of Michigan sentiment, Manufacturing ISM, US construction spending, spending / personal income, Friday
Some of the main movements in the markets:
- The S&P 500 fell 1.2% at 4 p.m. New York time
- The Nasdaq 100 fell 0.4%
- The Dow Jones Industrial Average fell 1.6%
- The MSCI World index fell 0.6%
- Bloomberg Dollar Spot Index fell 0.2%
- The euro fell 0.1% to $ 1.1581
- The British pound rose 0.4% to $ 1.3475
- The Japanese yen rose 0.6% to 111.29 per dollar
- The yield on 10-year treasury bills was little changed at 1.52%
- German 10-year rate rose one basis point to -0.20%
- UK 10-year yield rose three basis points to 1.02%
- West Texas Intermediate crude rose 0.2% to $ 75.01 a barrel
- Gold futures rose 2% to $ 1,756.70 an ounce