The American market has shown a decline due to a halt of government activities. The published data on the state of the national economy, which turned out to be below expectations, have contributed to the decline too. The drop of Dow Jones and Nasdaq is the largest since 2008. The indices have slipped by 6.9% and 8.4%. The S&P 500 has fallen by 7%. Now the indices keep bearish trends and, as experts say, this situation will continue in the near future.
The market volumes of shares traded were the largest in the last 7 years. Investors were preparing for the holidays. Today the bidding process will be short, on Tuesday the platforms will be completely closed.
The news from China positively influenced the market. The government announced tax cuts and a change in monetary policy next year. It turned out that the PRC will continue to make the economy and the market more open. However, even such news could not beat the negative because of the state of the US national economy.
The analysts believe that the situation has worsened due to the expiration of contracts for indices and stocks. Usually, this increases volatility. At this time, S&P 500 loses approximately 3%. Last week, the index also went through rebalancing.
Experts expected that the assessment of the economic growth would amount to 3.5% in annual terms. Following the revision, it was changed by 3.4%.
Durable goods turned out to be 0.8% more popular than last month.
Donald Trump again started talking about the need to build a wall between the States and Mexico. He also promised that he would close the government if the Democrats did not support the interim budget for its construction, which was estimated at 5.7 billion US dollars.
Some state institutions were closed at midnight on December 22. It is still unknown when the government will return to its work. Perhaps this will happen only in 2019. The Ministry of Finance, the Ministry of Justice, the State Department, the FBI, the customs and the Border Service are among the closed departments.
Another negative signal for the market is resignation of James Mattis as Secretary of Defense. President Trump’s decision to withdraw troops from Syria caused this decision.
Nike shares have risen by 7%, thanks to the reporting for the second quarter of the fiscal year. The results were better than the market expectations.
PepsiCo shares have slipped by 0.7% due to the news about the departure of the head of the local unit. Albert Carey, who has held the position for 3 years, will leave the company in March. Vivek Sankaran, who now manages operations at Frito-Lay, will be appointed to this post. Perrigo shares have fallen by 30%. The Irish authorities want to get 1.6 billion Euros of unpaid taxes from the pharmaceutical company. On Friday, Dow Jones has slipped by1.8%, S & P 500- by 2%, while Nasdaq lost its 3%.
The material was prepared with the participation of Katya Gordon,
a leading analyst of the brokerage company CT Trade