Wall Street stocks end week with worst performance in a month

Shares on both sides of the Atlantic posted their worst weekly performance in at least a month on Friday, with optimism about the earnings season tempered by fears about the rapid spread of the Delta variant of the coronavirus.

Wall Street’s S&P 500 fell 0.8% on Friday in New York City, ending the week down 1%, the benchmark’s worst weekly performance since mid-June. The tech-focused Nasdaq Composite also fell 0.8%, losing a total of 1.9% since Monday.

The sale “is not at all surprising given the backdrop of weakening market insiders and tight price action,” said Matt Orton, director and portfolio specialist for Carillon Tower Advisers.

Caroline Simmons, UK investment manager for UBS’s wealth management unit, added: “Concerns about the Delta variant are looming large, and as we enter a good earnings season, there there is a struggle between these two factors.

Analysts expect companies listed on the S&P 500 to post average earnings per share growth of 66% in the second quarter compared to the same period last year, according to forecasts compiled by Credit Suisse. According to WisdomTree, companies listed on the MSCI European Equity Index are expected to achieve overall earnings growth of 109%.

“We need to prepare for a bumpy summer in the markets,” said Gregory Perdon, co-chief investment officer of private bank Arbuthnot Latham.

“It is traditionally a time when there is less risk taking, less [trading] volume, less activity, ”he added,“ and we are not going to have much clarity on the intentions of the US central bank in the coming weeks. ”

Yields on 10-year US Treasuries posted their third weekly decline, remaining little unchanged at 1.3 percent on Friday.

After starting the week near 1.42%, the yield was dragged down by safe-haven purchases and assurances from Federal Reserve Chairman Jay Powell that the current high rate of inflation in the States United, which erodes bond yields over time, subside.

But inflation fears resurfaced on Friday after data showed US retail sales rose 18% more than expected in June compared to the same month last year.

“Markets may be digesting some ‘peak reopening’ growth, both in the economy and in earnings. So we saw the biggest sell off in cyclical / economically sensitive sectors like energy, finance and industrials, ”said Mona Mahajan, senior investment strategist of Allianz US, adding that the decline in bond yields was also an indicator of investor mistrust. rising demand drives up prices.

Kristina Hooper, chief global markets strategist at Invesco, said “markets often feel sick during this time” as the Fed prepares to move on to the start of normalization, adding: “But that doesn’t mean that the bull market is almost over. “

Across the Atlantic, stocks also ended the week lower with the continent-wide Stoxx Europe 600 falling 0.3% on Friday for a weekly decline of 0.6%.

Frankfurt’s Xetra fell 0.6% while London’s FTSE 100 slipped 0.1%, bringing its drop since Monday to 1.6%, the index’s biggest drop in four weeks.

A 40% jump in coronavirus infections in England in the week to July 10 meant the UK economy would experience a “slowdown in growth,” said Sanjay Raja, an analyst at Deutsche Bank, because “all signs indicate a voluntary social distancing limiting demand over the coming months ”.

Brent crude, the world’s benchmark for oil, fell 0.4% to $ 73.21 a barrel, after climbing 0.3% earlier today as Saudi Arabia and the United Arab Emirates fell. were approaching an agreement that could unlock an agreement between OPEC and its allies to increase production.

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