Lower start for Wall Street

(ABM FN-Dow Jones) US stocks are set to open lower on Wednesday pending the results of the midterm elections for Congress, where Republicans look set to win a majority in at least one of the two houses.

Futures on the leading S&P 500 index are in the red half an hour before opening. Futures on the technology index Nasdaq are also 0.4 percent lower.

Over the past three trading days, the S&P 500 has risen 2.9 percent, partly on hopes that the election will lead to a political stalemate in Washington.

According to analysts, this will be beneficial for stock prices as it will reduce uncertainty about unwanted regulations, while reducing the risk of higher taxes, while government spending may fall, making inflation more manageable. This, in turn, would mean that the Federal Reserve would have to raise interest rates less quickly or at a lower rate.

“In any case, it’s clear that neither side is winning the election with a ‘wave,’ and it looks like the Republicans will gain a majority in the House of Representatives, which will put the brakes on new fiscal stimulus in the next few year.” , analysts at Deutsche Bank said.

Economic news this afternoon comes from September wholesale figures and weekly oil figures.

Oil prices continued to fall. A December West Texas Intermediate future was 0.5 percent cheaper at $88.47. Brent oil for January costs $94.79 per barrel, 0.6 percent cheaper.

Euro/dollar trades at 1.0032. At the close of the US stock markets on Tuesday, there was 1.0076 on the boards.

Company news

Disney will spend less on marketing and content, after a disappointing third-quarter profit. The stock fell 8 percent before the market. Disney saw growth at Disney+ continue. The streaming service has now surpassed Netflix in the number of paying subscribers, but it had to invest heavily, including in the Star Wars and Marvel franchises.

Meta, the parent company of Facebook, Instagram and Whatsapp, is going to lay off 13 percent of its employees. 11,000 people have to leave. CEO Zuckerberg says in an open letter that he expected the growth in e-commerce and the strong revenue growth for Facebook to continue after the corona crisis. That turned out not to be the case, and high inflation is pushing advertising revenue down even further. Therefore, we now have to make significant cuts. The Meta stock looks set to start 4 percent higher.

Bed Bath & Beyond will issue stock to reduce its debt by $31.5 million. The stock is heading for a 1 percent lower start.

Automated Data Processing raises its dividend by 20 percent from $1.04 to $1.25 per share. ADP closed 2 percent higher on Tuesday.

Cryptocurrencies were under pressure after Binance announced it would take over rival FTX, which ran into liquidity problems. Bitcoin fell 3 percent in price to $18,130. On Tuesday, the digital currency was already 9 percent cheaper. Ether also became 20 percent cheaper in a few days.

Crypto exchange Coinbase, listed on the Nasdaq, looks set to open 6 percent lower after a price loss of nearly 11 percent on Tuesday.

Beyond Meat and Rivian publish their quarterly figures after the fair.

Lock positions

Wall Street closed higher on Tuesday. The S&P 500 index closed 0.6 percent in the green at 3,828.11 points, the Nasdaq technology index rose 0.5 percent to 10,616.20 and the Dow Jones climbed 1.0 percent to 33,160.83 points.

Source: ABM Financial News

From Beursplein 5, the editors of ABM Financial News closely follow developments on the stock exchanges, and in particular the Amsterdam Stock Exchange. The information in this column is not intended as professional investment advice or as a recommendation to make certain investments.

Leave a Comment