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It was a turbulent session on Friday and week last week on Wall Street as investors digested signals that the Fed intends to continue raising interest rates for longer despite holding the U.S. cash rate at 5.25-5.5% at the September meeting. The Dow Jones fell 0.31% on Friday while the S&P500 and Nasdaq lost 0.23% and 0.09% respectively, marking a fourth consecutive day of losses on Wall St.
Bond yields also surged on Friday after the central bank forecasted one more rate hike for 2023, which further depleted the attractiveness of equities compared to bonds in the eye of investors.
Website building software company Squarespace rallied 5% on Friday after UBS initiated coverage of the company with a buy rating, while book and media publishing company Scholastic plummeted over 14% on missing earnings expectations on the top and bottom lines.
Over in Europe, investor sentiment in the region was dampened on Friday by signals of further rate hikes out of the Fed in the U.S. The STOXX600 fell 0.3% on Friday taking the week’s losses to 1.57%, while Germany’s DAX fell 0.09%, the French CAC lost 0.4% and, in the UK, the FTSE100 rose just 0.07% to close out the week. Higher for longer interest rates is also a fear of European investors from the ECB.
On Thursday last week, both the Swiss National Bank and the Bank of England ended their respective rate runs but said there is no room for complacency and will raise again if required.
Locally on Friday, the ASX rose just 0.05% to close the final trading session of the week in the green after a dull few days of trading. Real Estate stocks were the worst performers on Friday while the utilities and energy sectors led the gains on the market. Costa Group rose 6.5% on Friday after the agricultural company entered into a Scheme Implementation Agreement with a consortium led by PSP to acquire the remaining shares in Costa Group that the consortium does not already own at $3.20ps.
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