After the previous day's rally, disillusionment spread on Wall Street over the course of Friday. One of the reasons for this is the gloomy quarterly reports from the major investment banks. Shareholders were even more disappointed by meat substitute provider Beyond Meat.
Earnings declines at the big US money houses have clouded the mood on Wall Street at the end of the week. In addition, retail sales surprisingly stagnated in September, which experts attributed to high inflation and rising interest rates. The Dow Jones index of standard values closed 1.3 percent lower on Friday at 29,634 points. The tech-heavy Nasdaq fell 3.1 percent to 10,321 points. The broad S
JPMorgan, Morgan Stanley, Citigroup and Wells Fargo all declined over the quarter as the stock market turmoil crippled investment banking and increased funds needed to cover loan defaults. However, the price reactions varied. A surprisingly significant drop in profits sent Morgan Stanley down more than five percent. At JP Morgan, however, stockbrokers had expected even worse: the papers gained 1.7 percent.
According to data from Refinitiv, analysts now expect the profits of the S
Fears of a recession weighed on commodity prices. North Sea Brent oil fell three percent to $91.75 a barrel, US light oil WTI lost 3.8 percent to $85.77. Losers in the Dow were shares in oil giant Chevron, which fell more than three percent. ExxonMobil fell 2.6 percent.
Another forecast reduction affected Beyond Meat. The shares of the provider of meat substitute products slipped by almost ten percent. Due to weakening demand, the company only expects total annual sales of 400 to 425 instead of 470 to 520 million dollars. It also announced that 200 of the approximately 1,100 jobs would be cut.
The situation on the British financial market remained tense. Because the government's debt-financed tax proposals have led to turbulence on the capital markets, Prime Minister Liz Truss dismissed Finance Minister Kwasi Kwarteng on Friday and partially relaxed the plans. Investors reacted with uncertainty and cashed in on the pound sterling. The currency fell as much as 1.5 percent to an intraday low of $1.1155 after gaining around five US cents in the past few days. British bond prices went on a rollercoaster ride. The yield on the 10-year paper first dipped and then rose to 4.319 percent. The Bank of England (BoE) plans to end its recent bond purchases to support financial markets on Friday.
