(New York) The New York Stock Exchange concluded on Wednesday up slightly in a very thin market, pending the conference of central bankers in Jackson Hole and after three sessions of decline.
Posted at 9:39
Updated at 6:01 p.m.
According to final results, the Dow Jones index gained 0.18% to 32,969.23 points, the technology-heavy NASDAQ advanced 0.41% to 12,431.53 points and the S&P 500 rose 0.41% to 12,431.53 points. 0.29% to 4140.77 points.
“The market saw a small rebound, perhaps a sigh of relief before (Fed Chairman) Jerome Powell’s speech on Friday and after several bear sessions,” Spartan Capital’s Peter Cardillo said.
Since the beginning of the week, the markets have been waiting for the intervention of the boss of the American central bank, scheduled for Friday at 2 p.m. GMT at the podium of the annual symposium of central bankers in Jackson Hole (Wyoming).
Investors hope to detect a clue to future monetary policy: will the Fed commit to continuing to raise rates sharply to fight inflation at the risk of accentuating a slowdown that is looming in the world or could she point out the possibility later of a change of tone for a more flexible policy?
“The Fed Chairman’s speech will be the highlight of the event giving investors clues as to what to expect from monetary policy in the face of inflation,” Schaeffer’s Lillian Currens intoned.
In recent sessions, bond yields have risen and equities have fallen, showing that investors have been more priced in to the possibility of a Fed resolutely determined to tighten the monetary screw with no intention of changing course in the coming months.
Thursday, a second estimate of US GDP from April to June should confirm that the world’s largest economy has contracted (-0.9% at an annualized rate) for a second quarter in a row.
Friday, before Mr. Powell speaks, a crucial indicator of inflation for July, the PCE index – the favorite barometer of the Fed -, will say if the price run has slowed down, as shown by the index competing with the CPI earlier in August (8.5% over one year instead of 9.1% in June).
Mixed indicators
Mixed data on the macroeconomic front marred the day. Pending home sales fell 1% in July for a second consecutive monthly decline, but less than analysts expected.
Durable goods orders stagnated last month, due to a drop in orders for military aircraft.
“We had confirmation that the real estate market was in recession, but in durable goods orders, deliveries were up, which removed a little negativity,” judged Peter Cardillo.
On the stock market, department stores Nordstrom plunged 19.96% as the chain trimmed its full-year sales forecast, indicating that it had notably seen a slowdown in purchases by lower-income consumers in June.
Salesforce, the cloud computing customer relations specialist, fell 5.17% in electronic exchanges after a positive close of +2.28% ($180.01).
The group disclosed weaker-than-expected third-quarter revenue guidance, even though its second quarter was up.
Semiconductor maker Nvidia (-2.80% after the close) also revised down its sales projections for the third quarter while its result for the second deteriorated sharply compared to the same time last year. ‘before. As he had warned the market at the beginning of August, his turnover devoted to video games collapsed by 33% over one year.
Peloton, in freefall since November as the COVID-19 pandemic and lockdowns waned, jumped 20.36% to $13.48. Investors have enthusiastically welcomed the smart exercise bike maker’s move to now sell its devices on Amazon, abandoning its exclusive distributor policy.
Last session for a nominal value approaching 900 dollars for Tesla action (+0.22% to 891.29 dollars) which will be divided by three on Thursday. The electric vehicle manufacturer had already divided its share by five in 2020 to make the title more accessible to its employees and small shareholders, thus imitating several big names in technology.
In Toronto
The Toronto floor’s S&P/TSX Composite Index gained 36.03 points to 20,021.38 points.
Wednesday’s lack of momentum shows that financial markets are waiting for the Jackson Hole conference to see if Fed Chairman Jerome Powell makes any comments that could indicate what the US central bank plans to do with regard to the inflation and future interest rate increases,” said Vincent Tonietto, senior vice-president and portfolio manager at Fiduciary Trust Canada.
Recession fears among investors are still high, Tonietto observed, despite a strong six-week rally this summer that helped stock markets recoup much of the losses suffered during June’s bear market.
Tonietto pointed out that yield curves remain inverted, a potential red flag for the economy and financial markets. He added that any of Mr. Powell’s comments on Friday will likely serve as a “recalibration point” for the markets.
“It will probably be a time when you see how crowded the bearish versus bullish side is at this time,” he completed.
In the currency market, the Canadian dollar traded at 77.02 cents US, down from its average rate of 77.09 cents US the previous day.
In Canada, the financial services sector was hit for a second straight day due to weaker-than-expected quarterly profits from the country’s largest bank. On Wednesday, a day after Scotiabank earnings sent bank stocks tumbling, Royal Bank of Canada announced that its third-quarter profit fell from a year ago due to a sharp pullback in markets. as well as the deterioration of the economic outlook caused by the increase in borrowing costs.
RBC stock price closed down $3.29, or 2.60%, to $123.20 on Wednesday, while the S&P/TSX Financials Sub-Index was down 1, 23% at the end of the day.
“If the trajectory of (future) interest rate hikes is higher than what the markets expected, this could affect the profitability of banks, explained Mr. Tonietto. And so I guess with the (earnings) news we’re seeing today and the unknowns from (Powell’s) speech on Friday, investors are a bit more cautious. »
The healthcare index was the day’s best performer, up 4.36% on the day, largely due to a strong rally in cannabis company stocks. Canopy Growth’s share price rose more than 13% to $5.03 on Wednesday, while Aurora Cannabis was up nearly 10% to $2.02 per share.
With The Canadian Press