US chem shares plunge as market sinks after Fed rate news
Al Greenwood
18-Dec-2024
HOUSTON (ICIS)–US listed shares of chemical companies fell sharply on Wednesday, with many falling by more than 4%, after the Federal Reserve lowered its expectations for rate cuts and raised them for inflation.
The following table summarizes the major indices followed by ICIS.
Index | 18-Dec | Change | % |
Dow Jones Industrial Average | 42,326.87 | -1,123.03 | -2.58% |
S&P 500 | 5,872.16 | -178.45 | -2.95% |
Dow Jones US Chemicals Index | 829.38 | -21.74 | -2.55% |
S&P 500 Chemicals Industry Index | 871.47 | -23.78 | -2.66% |
The Federal Reserve lowered its benchmark federal funds rate by a quarter point as expected. However, it now expects to lower rates by a half point in 2025, down from earlier expectations of cuts totaling 1 point.
Meanwhile, inflation may not reach the Fed’s target until 2027.
The prospect of fewer rate cuts contributed to a run-up in yields for longer term government debt.
The yield on 10-year Treasury notes rose past 4.5%, a level it last reached at the end of May.
Yield on these notes affects rates for other types of longer term debt, notably those for 30-year mortgages.
Elevated mortgage rates have made housing unaffordable for a growing number of consumers. That has lowered demand for houses, appliances and furniture, all important end markets for many plastics and chemicals.
If longer term rates remain elevated, it is unlikely that chemical markets will recover as expected in the second half of 2025.
DEFICIT CONTRIBUTES TO ELEVATED
MORTGAGE RATES
Another trend
elevating rates on longer term debt is the
growing size of the government deficit.
To fund the expanding deficit, the US will issue larger amounts of government debt. An increase in the supply of debt will lower prices, and yields on debt are inversely related to price.
PRICES FOR US-LISTED CHEMICAL
SHARES
The following table lists
the US-listed shares of chemical companies
followed by ICIS.
Symbol | Name |
$ Current
Price | $ Change | % Change |
ASIX | AdvanSix | 28.72 | -1.38 | -4.58% |
AVNT | Avient | 42.37 | -3.55 | -7.73% |
AXTA | Axalta Coating Systems | 35.01 | -1.38 | -3.79% |
BAK | Braskem | 3.98 | -0.29 | -6.79% |
CC | Chemours | 17.36 | -0.85 | -4.67% |
CE | Celanese | 67.94 | -0.47 | -0.69% |
DD | DuPont | 77.62 | -2.51 | -3.13% |
DOW | Dow | 40.15 | -0.42 | -1.04% |
EMN | Eastman | 90.95 | -4.40 | -4.61% |
FUL | HB Fuller | 69.81 | -2.16 | -3.00% |
HUN | Huntsman | 18.3 | -0.26 | -1.40% |
KRO | Kronos Worldwide | 9.77 | -0.19 | -1.91% |
LYB | LyondellBasell | 74.8 | -0.64 | -0.85% |
MEOH | Methanex | 45.75 | -1.37 | -2.91% |
NEU | NewMarket | 522.36 | -16.76 | -3.11% |
NGVT | Ingevity | 41.61 | -1.79 | -4.12% |
OLN | Olin | 34.1 | -1.37 | -3.86% |
PPG | PPG | 121.25 | -0.81 | -0.66% |
RPM | RPM International | 126.49 | -4.93 | -3.75% |
SCL | Stepan | 68.33 | -3.17 | -4.43% |
SHW | Sherwin-Williams | 348.66 | -14.13 | -3.89% |
TROX | Tronox | 10.53 | 0.39 | 3.85% |
TSE | Trinseo | 5.41 | -1.17 | -17.78% |
WLK | Westlake | 115.54 | -2.00 | -1.70% |
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