US Close: Soft end to a wild week, Nike’s warning, DC in Focus

Wall Street is ending on a soft note after a wild week filled with central bank rate decisions around the world mostly signaled investors should be prepared to have a much smaller punchbowl of stimulus going forward and as early earnings suggest supply chain constraints and labor shortage problems are not getting any better.  What’s also weighing on risk appetite is the growing stress in the Chinese property sector.  The Evergrande crisis won’t have a quick fix and that uncertainty will continue to weigh on Asia.

With Treasury yields surging this week, it is no surprise the Nasdaq is poised to finish lower for a third straight week.  The S&P 500 index has recovered the earlier in the week Evergrande crisis losses and Fed taper setup.

Nike’s earnings results gave a preview of what could be a tough earnings season.  The shoe and athleticwear maker’s outlook was cut over production shutdowns in Vietnam and as shipping delays become a growing problem for retailers.

DC

The posturing in Washington DC could intensify over the weekend that could threaten Monday’s tentative deadline for the House vote on the bipartisan infrastructure package.  Republicans have expressed that they are not willing to raise the debt ceiling and that could weigh on risk appetite.

Thursday is the deadline for Congress to pass a stopgap funding bill that will avert a government shutdown.  The debt ceiling standoff will likely go down to the wire, but expectations are still optimistic that Republicans won’t want to take the blame for sending the economy immediately into a recession and as that could trigger millions of jobs lost and wipe out $15 trillion in wealth.

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Ed Moya

Ed Moya

Senior Market Analyst, The Americas at OANDA
With more than 20 years’ trading experience, Ed Moya is a senior market analyst with OANDA, producing up-to-the-minute intermarket analysis, coverage of geopolitical events, central bank policies and market reaction to corporate news. His particular expertise lies across a wide range of asset classes including FX, commodities, fixed income, stocks and cryptocurrencies. Over the course of his career, Ed has worked with some of the leading forex brokerages, research teams and news departments on Wall Street including Global Forex Trading, FX Solutions and Trading Advantage. Most recently he worked with TradeTheNews.com, where he provided market analysis on economic data and corporate news. Based in New York, Ed is a regular guest on several major financial television networks including CNBC, Bloomberg TV, Yahoo! Finance Live, Fox Business and Sky TV. His views are trusted by the world’s most renowned global newswires including Reuters, Bloomberg and the Associated Press, and he is regularly quoted in leading publications such as MSN, MarketWatch, Forbes, Breitbart, The New York Times and The Wall Street Journal. Ed holds a BA in Economics from Rutgers University.
Ed Moya