The Dow Jones fell again after retail sales prompted interest rate cuts

The Dow Jones index fell 0.37% to 37,222 points, while the Standard & Poor's 500 index lost 0.67% to 4,733 points. The Nasdaq 100 index fell 0.92% to 14,808 points.

New York's major indexes came out of a bearish session on Tuesday: the Dow Jones lost 0.62%, while the S&P 500 and Nasdaq fell 0.37% and 0.19%, respectively.

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The statements of Federal Reserve Governor Christopher WallerAcknowledging that the central bank was likely to cut interest rates this year, he explained that there was no need to “rush” monetary policy decisions. Waller justified this statement by the fact that the US economy has proven very resilient, despite raising interest rates. Furthermore, Waller said that when the time comes to start lowering official interest rates, the process must be done as methodically and carefully as possible.

“With his words, Waller indicated that The start of the rate-cutting process is not as imminent as the markets are discounting (they are betting on March), and that rate cuts, unlike other occasions, will not happen as quickly. As most investors expect. Juan J. Fernandez Figares, from Link Gestión.

So far, traders expect about a 65% chance that the Fed will start cutting interest rates in March, according to CME Group's FedWatch tool.

Investors today should also pay attention to new comments from a Fed official, in this case New York Fed President John Williams, who will speak shortly before the close.

Currently in fixed income, The yield on ten-year benchmark bonds rose to more than 4%.By 4.062%. On two-year bonds, the yield rises six points to 4.285%.

Today they know what the macroeconomic agenda is about Retail sales for December increased by 0.6% compared to the previous month, higher than market expectations, between 0.3% and 0.4%. Meanwhile, import prices showed no change in December, when the market expected a 0.5% decline.

Investors also learned about December industrial production, up 0.1%. Later in the session the Fed's Beige Book will be published.

Another major focus for the market is on the Q4 2023 earnings season, which is expected to be an important test for the market when determining the composition of 2024. Investors already knew the results of the major banks, including Goldman Sachs and Morgan Stanley just yesterday, and Bank of America and JPMorgan Chase last week, and so far the response has been lukewarm.

“This season may lack the flashy ‘end of earnings recession’ headlines we got last quarter, but it takes on added significance because it sets the tone for 2024,” he explains. Jeffrey Buchbinder, chief equity strategist at LPL Financial. “After 2023 was a year in which improving valuations led to strong gains, This year's earnings will likely bear the heavy burden“.

Shares of Interactive Brokers fell 3.65% after posting mixed quarterly results. Revenue was $1.15 billion, slightly higher than the $1.14 billion that analysts had expected. However, the company reported earnings of $1.52 per share, lower than the expected $1.55.

Interactive Brokers also noted that options volumes were up 21% and client account volumes were up 23% year over year, but equity volumes were down 22%.

Tesla stock, which fell more than 2% as investors took stock, also opened lower New price drop in Germany. This time the price cut is focused on the Model Y and amounts to between 8% and 9% depending on which version of the mentioned model is affected.

The move, which follows another price cut in China, comes after the German government prematurely withdrew subsidies for electric car purchases last month, when in principle they were supposed to remain in place until the end of this year.

Meanwhile, Deutsche Bank downgraded electric car maker Rivian Auto from “buy” to “hold,” indicating that the company's progress toward a positive gross margin may be slower than expected. Shares fall more than 4%.

In the aviation sector, Spirit Airlines is once again subjected to a harsh penalty of more than 10%. After yesterday it had already halved its value on the stock market. A federal judge has blocked JetBlue Airways' proposed $3.8 billion acquisition of the company, citing reduced competition from a potential merger. The merger would have created the fifth-largest US airline, but the Justice Department filed a lawsuit last year, saying it would increase airline ticket prices.

Following this announcement, Bank of America made an “underweight” recommendation for Spirit Airlines, saying the airline had done so “We have a difficult road ahead to return to our historic level of growth and profitability.”. Susquehanna Financial Group also downgraded Spirit's advice rating from “neutral” to “negative.”

In raw materials markets, oil prices are falling sharply. Despite continued tensions in the Red Sea, the prospect of weak demand given worrying signs about the Chinese economy and the strength of the dollar appears to weigh further on investor sentiment.

US West Texas Intermediate futures fell 1.83% to $71.20 a barrel, while European benchmark Brent crude fell 1.61% to $77.03.

The dollar stabilized after reaching its highest level in a month against a basket of currencies. The dollar index reached 103.58 points, its highest level since December 13. However, the euro is trying to rise 0.10% against the dollar, with the currency reaching above $1.0864 per community currency.

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