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MARKET REVIEW. The New York Stock Exchange ended sharply lower on Wednesday after the U.S. congressional election failed to see the expected Republican wave as investors waited for inflation numbers on Thursday.
The Toronto Stock Exchange closed more than 300 points lower, dragged down by a slide of more than 4% in the energy sector and losses in most other sectors.
To (re)consult market news
Stock market indices at closing
In Toronto, the S&P/TSX ended down 316.06 points (-1.61%) at 19,344.25 points.
In New York, the S&P500 fell 79.54 points (-2.08%) to 3,748.57 points.
the Nasdaq fell 263.03 points (-2.48%) to 10,353.17 points.
the DOW fell 646.89 points (-1.95%) to 32,513.94 points.
the loon fell US$0.0054 (-0.7238%) to US$0.7393.
the oil fell US$3.36 (-3.78%) to US$85.55.
L’gold retreated US$7.30 (-0.43%) to US$1,708.70.
the bitcoin decreased by US$2,404.14 (-13.04%) to US$16,037.74.
The context
Disappointing corporate results, a debacle in the cryptocurrency universe, a new gauge of US inflation expected on Thursday and finally the congressional elections, the outcome of which is still uncertain, have cooled brokers.
“Stocks traded lower as the final midterm election results continue to be tabulated and congressional scrutiny remains uncertain,” Schwab analysts summed up.
The market fell “because we don’t have all the results yet, so these elections were a pretext for profit taking” after several days of increases for the New York Stock Exchange, explained for his part Peter Cardillo of Spartan Capital.
All the results of the Congressional elections were indeed not yet known. The Republican opposition should dominate the House of Representatives, but not to the extent that was expected, the Republican wave having not taken place. As for the Senate, four seats are still uncertain.
“Whatever the outcome, the margins will be very narrow and we are heading towards a paralysis of the government anyway,” added Peter Cardillo. Few political changes are therefore to be expected, whether at the level of regulations in the banking or energy sectors, for example, or the tax code, which is a priori not to displease the financial markets.
Volatility of cryptocurrencies
Beyond profit taking, the stock market was shaken by the extreme volatility of cryptocurrencies.
The Binance trading platform, which announced on Tuesday evening the hasty acquisition of its rival FTX to support it in liquidity problems, abruptly abandoned the operation the next day.
Binance mentions possible mismanagement of funds and the likelihood of an investigation by US authorities.
Players in the cryptocurrency space have suffered. The title of the trading platform Coinbase (COIN) lost 9.54% to US$45.98.
The popular broker app Robinhood (HOOD) dropped 13.76% to US$8.40 after already plunging 19% the previous day.
The disappointing results of Walt Disney (DIS)which saw its Disney+ streaming service double its operating loss in the third quarter despite an increase in its subscribers, caused the entertainment group’s share price to plunge (-13.16% to US$86.75).
Its competitors in streaming have also sagged as netflix (NFLX, -3.34% to US$254.66) Where Roku (ROKU, -5.92% to US$48.11).
The action Tesla (TSLA) fell 7.17% to US $ 177.59 after Elon Musk announced that he had sold some $ 4 million in shares in the automaker, which is to finance the takeover of the social network Twitter at a high price.
All eleven S&P sectors ended heavily in the red, led by energy (-4.88%) while crude prices fell sharply, followed by the discretionary consumer spending sector (- 3.12%), information technology (-2.65%) and communication services (-1.90%).
Meta (META, Facebook) on the other hand was welcomed by investors, climbing 5.18% to US$101.47 while Mark Zuckerberg’s group announced the loss of 11,000 jobs, or some 13% of its workforce.
On Thursday investors were awaiting US inflation figures for October. Analysts are still forecasting a monthly rise in the CPI index of 0.5% after +0.6% in September.
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