Powell shows the facts!
Wall Street fell sharply on Friday, after the intervention of the Chairman of the Fed Jerome Powell on the subject of the great issue of Jackson Hole … “and that the “economic crisis” (not to mention the recession!) will be important … The Dow Jones corrected with 3.03 % to 32,283 pts, while the S & P 500 gave 3.37% to 4,057 pts and the Nasdaq fell. about 4% (-3.94%) to 12,141 pts. On the Nymex, the barrel of WTI crude fell 1% to $91.55. The dollar index returned 0.2 % against a basket of currencies containing the euro against the greenback.
Fed Chairman Jerome Powell, who spoke today at the Jackson Hole symposium, a meeting of central banks in Wyoming, promised that the central bank of the US “will use its tools strongly” to take inflation, which was very close to its maximum. 40 years … “We must continue until the end of the project”, confirmed the head of the Fed, with an inflation target of about 2%. Therefore, the Fed should continue to raise rates and keep them until it is satisfied that inflation is under control, Powell continued.
“Our decision at the September meeting will depend on the amount of information coming in and the evolution of opinion,” the leader added. Meanwhile, according to the CME Group’s FedWatch tool, the probability of another increase of 75 points on September 21, which will be the third in a row of such growth, is more than 51% (variation 3-3.25%), while the probability of an increase of 50 points is 48.5% (variation of 2.75-3%).
Powell added that the US economy, households and businesses should expect “a little bit of pain” from this necessary monetary tightening… He also said that the US economy is slowing down, although it still shows “strong momentum”. The labor market is still tight at the moment and the demand for workers exceeds the supply. The monetary policy stance is currently close to neutral, but Powell suggests further tightening is needed as long as inflation remains high.
Powell means that high inflation will remain “temporary” so that eventually inflation is controlled… “Although high interest rates, slow growth and a weak labor market will reduce inflation, it will also hurt families and businesses”.. “These are unfortunate costs to reduce inflation, but failure to restore price stability could mean great pain,” said the Fed chairman.
According to the indicators, the personal income of American families in the month of July 2022 appreciated by 0.2% compared to the previous month, against the agreement of + 0.6% and an increase of 0.7% in the previous month. Consumer spending in July rose 0.1%, against a 0.4% consensus and 1% in June. The good news comes from the price index of ‘core PCE’, closely followed by the Fed, which stood at +0.3% in July compared to the previous month, against the consensus of 0.6%. Adjusted prices rose 4.7% year-on-year, against the 4.8% market consensus.
The volume of international trade in goods (advance reading) for the month of July showed a decrease of $ 89.1 billion, against the consensus of -97.5 billion and an adjusted level of -98.6 billion.
The final index of US consumer sentiment measured by the University of Michigan in August came out at 58.2, against the consensus of 55.1.
Electronic Arts takes 3.5%, while the Amazon title loses 4.8%. The American giant of e-commerce may announce an agreement to acquire a publisher of video games … According to USA Today, rumors have spread on the Internet about the possibility of taking Jeff Bezos’s team on EA. Apple (-3.8%) and Walt Disney (-2.9%) will also be considered suitable for game publishers… Such a “cooperation” would not be unreasonable, after a similar movement with Microsoft (-3.9%). which offered Activision Blizzard (-0.5%) for 69 billion dollars.
Amazon recently announced that it will acquire iRobot, the maker of the Roomba home automation system. Electronic Arts would be a big piece with its market value of 35 billion … Rumors of Amazon / EA should be taken with a grain of salt, however. On CNBC, David Faber, citing his sources, believes that Amazon “does not want to offer on EA”.
KKR (-5%) has withdrawn its offer of 88 Australian dollars per share on Ramsay Health Care, reports the Australian Financial Review (AFR), stating that the American fund has sent a letter to the board of directors of Ramsay, meaning that the opportunity has been abandoned. In fact, KKR wants to acquire Ramsay’s operations in Australia and leave Ramsay’s operations in France to Ramsay Health Investors… Ramsay Health Care would be willing to participate in KKR, but they believe that giving all the money should be respected or that the statements. of another thought must be added.
Merck (-1.2%). Talks to acquire American Merck and its partner Seagen have stalled over price disagreements, Bloomberg reported. People familiar with the matter said that although negotiations could resume, Merck and Seagen have not yet agreed on a price. Last month, the Wall Street Journal reported talks of a price of more than $200 per share for Seagen. The American pharmaceutical giant has been studying the acquisition of the biotechnology company for a long time. Seagen is currently worth $30 billion on Wall Street, compared to Merck & Co.’s $228 billion. The newspaper added that problems may also be faced by the authorities.
Moderna (-3.8%) is suing Pfizer (-2.2%) and its German partner BioNTech (-4%) for patent infringement in the development of the first Covid-19 vaccine approved in the United States, claiming that they copied the technology that Moderna developed years before the pandemic. The lawsuit, which seeks irreparable damages, was filed in the US District Court in Massachusetts and the Düsseldorf District Court in Germany, Moderna said in a press release on Friday.
“We are filing these lawsuits to protect the mRNA technology that we pioneered, invested billions of dollars in developing, and had patented ten years before the outbreak,” said Moderna CEO Stéphane Bancel.
Marvell (-8.9%), the American chip maker, improved after a seemingly disappointing third quarter, and even a strong second quarter supported by data events.
Bed Bath & Beyond (+6%), the struggling American retailer, which is heavily indebted and has recently left investor Ryan Cohen, the boss of GameStop, will share its strategy next week.
Confirm (-21.3%), the American fintech group, falls on Wall Street. The just-disclosed quarterly loss came out heavier than expected. The forecast is flat.
Gap (-1.9%), the American retailer, posted an adjusted profit that exceeded market expectations. Earnings also win the deal. This topic is profitable today on Wall Street. Gap, however, withdrew its guidance for the year, against the backdrop of the search for a new CEO and economic uncertainty.
Dell Technologies (-13.5%) revealed earnings lower than expected last night, after posting the weakest business growth in more than a year and a half in the second quarter, due to inflation, the strong dollar and the epidemic in China. …