Wall Street ends lower, caution ahead of weekend

The New York Stock Exchange ended lower on Friday, after a topsy-turvy week, with investors still on alert and wary ahead of the weekend.

The Dow Jones contracted 1.19%, the Nasdaq index lost 0.74% and the broader S&P 500 index fell 1.10%.

For Art Hogan, of B. Riley Wealth Management, the session was marked by strong risk aversion, “because we don’t know what could happen over the weekend” on the banks’ front.

The first victim of this climate, the American regional bank First Republic, considered the next weak link in the banking crisis, which plunged by 33.00%, after having rebounded by almost 10% the day before.

The announcement on Thursday of the injection of 30 billion dollars in deposits by a group of eleven major American banks into the coffers of this Californian establishment only provided its share price with a short-term support.

In one week, First Republic wiped out 80% of its market capitalization.

If it was the most abused on Friday, FRC, its stock symbol, was accompanied in the turmoil by other regional banks, in particular another Californian, PacWest (-18.95%), as well as Western Alliance (-15 .47%), headquartered in Phoenix (Arizona), or the Texas establishment Comerica (-8.44%).

If their slippage was less spectacular, the giants of the sector also suffered a sharp decline. Prominent members of the Dow Jones, Goldman Sachs (-3.67%) and JPMorgan Chase (-3.78) helped lead Wall Street’s flagship index.

“The volatility we’ve seen this week has been remarkable,” said Christopher Low of FHN Financial. “And when you have such volatility, it pushes the algorithms to sell. So it’s no surprise that we see people taking a few chips off the table before the weekend.”

To make matters worse, Friday was a so-called “four witches” day, which corresponds to the expiry of several trillions of dollars of derivatives based on stock market indices or individual stocks.

This deadline often increases volatility on Wall Street during the session in question.

Another indicator of traders’ anxiety and appetite for assets deemed safe, US Treasuries’ prices soared, pushing rates down, with the two moving in opposite directions.

The yield on 10-year US government bonds fell to 3.43%, against 3.57% the day before.

However, against all expectations, bitcoin pranced (+7.34%), although it is theoretically considered a risky asset. It pulled in its wake values ​​linked to the cryptocurrency sector, such as the “mining” specialist Riot Platforms (+14.89%) or the Coinbase trading platform (+10.62%).

The Nasdaq fared better than the Dow Jones, thanks to a few mega-caps, such as Alphabet (+1.38%) and Microsoft (+1.17%), still supported by the announcements of the two groups on the integrating artificial intelligence into their products.

Chinese electric vehicle maker Xpeng jumped (+6.12%), despite posting a bigger-than-expected quarterly loss and lower-than-expected revenue. The group nevertheless expressed confidence in the resumption of its growth.

Its competitor Tesla fell (-2.17%), as did other manufacturers of electric vehicles such as Rivian (-3.34%) or Lucid (-1.17%).

FedEx paraded (+7.97%), after having raised its forecasts for the whole of the year, despite a disappointment on its turnover for the third quarter of its shifted fiscal year (from June to May). The group expects to have reduced its workforce by 25,000 jobs over a year by the end of May.