Closures of boundaries in the face of Covid-19, concerns of U.S. blockages Senate on the $1,900 billion Biden program, weak IBM and Intel announcements, strong valuations on the stock exchange. Wall Street’s list of risk factors rose, leading to caution on Friday, even though shares rose for the whole of the week. Oil gave way although the dollar picked up momentum.
In the end, the Dow Jones gave up 0.57% to 30,996 points, while the S&P 500’s large index dropped by 0.30% to 3,841 points, but the Nasdaq Composite index, heavy in electronics and biotech stocks, managed to finish up 0.09% at 13,543 points, setting a new all-time high.
All three indices improved by 0.6 percent, 1.9 percent, and 4.2 percent for the week as a whole, respectively, celebrating the inauguration of US President Joe Biden on Wednesday and the promise of his turnaround agenda in the light of the health crisis.
In the stock market, the Dow Jones index was led by IBM (-9.9 percent) and Intel (-9.3 percent). On the fourth-quarter earnings, the former disappointed, while the latter did better than expected on the financials, but its new boss disappointed the investors with his new approach.
The new macroeconomic indicators have come out ahead of forecasts in the United States, despite inflation concerns. Therefore, in January, the U.S. composite “flash” PMI index rose to 58, versus a sector consensus of 55.5 and 55.7 in December. The production indicator stood at 59.1, compared to 56.5 by consensus. To a consensus of 53.8, the services measure came in at 57.5. Consequently, all components of the index point to an increase in growth in January. The flash manufacturing PMI in the Eurozone as a whole was high at 54.7, but the services indicator dropped to 45.7 (any figure below 50 indicating a contraction).
Moreover in the U.S., the resale of existing homes hit 6.76 million in December, 6.55 million by consensus, and 6.69 million in November.