Averages Fall On Wall Street After Investors Reevaluate Earnings Outlook

Barry Adams
16 Dec, 2022
New York City

Stocks on Wall Street traded lower on Friday as recession worries forced investors to reevaluate stock prices and future earnings growth outlook. 

Investors have been rooting for a soft landing narrative on the hopes that the Federal Reserve may slow or even pause aggressive rate hikes after multiple increases this year. 

However the soft-landing narrative has been facing headwinds with weak economic data on retail sales and housing market. 

The S&P is set to fall at least 1% this week and extend weekly losses for the second week in a row. 

Stocks and market indexes are expected to be volatile as $2.6 trillion of index options are scheduled to expire today, according to a report from Goldman Sachs. 

The S&P 500 index declined 1.1% to 3,856.25 and the Nasdaq Composite index dropped 0.6% to 11,278.0. 

 

Commodities and Oil Face Recession Headwinds 

Oil futures declined 2% and extended three-week slide as recession worries dominated market sentiment. Brent crude in London fell to $79 and WTI crude in New York dropped to $74 a barrel.

Crude oil declined $2.59 to $73.49 a barrel and natural gas futures eased 50 cents to $6.46 a thermal unit. 

 

Bond Yield Curve Stay Inverted 

Treasury yields advanced on Friday a day after the release of weaker-than-expected November retail sales and fears of recession mounted in financial markets. 

On Wednesday Fed Chairman Jerome Powell reiterated the central bank's commitment to fight high inflation and continue an aggressive rate hike campaign.  

The yield on 2-year Treasury notes inched up to 4.30%, 10-year Treasury notes jumped to 3.54% and 30-year U.S. Treasury bonds advanced to 3.59%. 

 

U.S. Stock Movers 

Goldman Sachs Group declined 1.1% to $345.94 and the investment banker and financial services provider is likely to cut as much as 8% of its workforce in January, according to a CNBC quoting anonymous source.