Wall Street: Initiatives as limited as possible

(CercleFinance.com) – Wall Street rallied on Thursday for the penultimate session of the year in narrow volumes, thanks mainly to employment statistics that are considered quite encouraging.

At the end of the morning, the Dow Jones manages to gain 1% to 33,201.7 points, while the Nasdaq Composite gives an increase of 2.3% to 10,451.3 points.

Investors welcomed the announcement, an hour before the open, of an increase in unemployment benefits, which could signal the beginning of an easing in the labor market, a phenomenon that is likely to pressure the Fed to curb its rate hikes.

Registrations for unemployment benefits increased by 9,000 during the week of 24 December, which corresponds to 225,000 against 216,000 the week before, according to the Ministry of Labour.

Although this indicator reflects minor tensions in the labor market, it does not prevent investors from investing in assets considered safe, such as gold or the yen.

Less than 24 hours from the end of the 2022 fiscal year, the S&P 500 is on track for its worst annual performance since the 2008 financial crisis, down nearly 20% since January 1.

In this lackluster environment, investors seem to want to wait for the next catalyst and are already starting to think about their strategy for 2023 as they continue to digest the increase in cases of Covid contamination in China.

Stakeholders fear that the worsening health situation in the country will lead to a slowdown in the Chinese economy, which in turn will affect US economic activity.

This fear of a possible recession is punishing the dollar, neglected since yesterday in favor of the yen, a value considered safer in the currency market.

The dollar is also weakening against the euro, around 1.0660.

The dollar’s bout of weakness did not benefit commodities, with worries about the Chinese economy sending US crude oil down 1.8% to $77.50 a barrel ahead of weekly oil figures due late in the morning.

US Treasuries are benefiting from their safe haven status, with the ten-year Treasury yield falling towards 3.86% this morning.

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