Wall Street suffered a rare intraday reversal (around -2% in a straight line from 7:30 pm to 10:00 pm) following a statement by Minneapolis Fed President Neel Kashkari: he warned that 'if inflation continued to follow a pattern of declining rates and occasional spikes, the question would arise as to whether to forego any rate cuts this year' (he was leaning towards 2 cuts in 2024, and provided prices continued their downward trend).

Kashkari's statements had the effect of a cold shower, and the Dow Jones fell from +0.5% to -1.35%, the S&P500 from +0.75% (to 5,257, within 0.15% of its highs) to -1.35% and the Nasdaq from +1.1% to 16,468 to -1.5% around 16,050.

The "tech" index experienced one of the biggest intraday swings of the year, and not "in a good way", following sustained sell-offs on AMD -8.3%, KLA -3.6%, Nvidia and Broadcom -3.4%, Micron -3.1%, Marvell -2.9%, Alphabet -2.8%, Qualcomm -2.4%....

Reminder: Wall Street had taken +16% in 9 weeks at the end of 2023 on expectations of 7 to 8 easings in the cost of money in 2024.

As a sign of the stress that shook Wall Street, the VIX, which had been hovering in the "complacent" zone around 13.75 in the morning, jumped +15% to 16.50, the biggest movement since February 13 and, above all, the most negative since October 13, 2023 (16.70/19.3).

In addition to doubts about monetary easing in June, the geopolitical climate in the Middle East is becoming anxious, with unprecedentedly aggressive actions against Iranian diplomatic representations on foreign soil, followed by "accidental" shootings targeting Western aid workers.

Investors also took note of a series of statistics on Thursday: the US trade deficit widened to $68.9 billion in February, compared with the previous month's $67.6 billion (which was revised from an initial estimate of $67.4 billion), according to the Commerce Department.

This 1.9% month-on-month increase in the deficit reflects a 2.2% rise in US imports of goods and services, to $331.9 billion, while exports rose by 2.3% to $263 billion.

The Labor Department reported 221,000 new US jobless claims for the week ending March 25, up 9,000 on the previous week's revised figure (212,000 instead of 210,000).

Copyright (c) 2024 CercleFinance.com. All rights reserved.