(New York) The New York Stock Exchange opened higher on Thursday after a series of negative sessions, the market remaining cautious before the publication of two inflation indicators on Friday and Tuesday.
By 9:55 a.m. EST, the Dow Jones gained 0.55%, the NASDAQ index rose 0.50% and the broader S&P 500 index rose 0.52%.
“The main catalyst” for the rise “is the fact that we needed a breather after a wave of sales,” explained Art Hogan, of B. Riley Wealth Management.
The S&P 500 remains, in fact, on five consecutive sessions of decline and, since the beginning of the month, never the three flagship indexes of Wall Street have yet finished together in the green.
“The softness of the market was fueled by concerns about growth and the prospect of the Fed (US central bank) going too far in its monetary tightening and tipping the economy into recession”, recalled, in a note, Patrick O’Hare, of Briefing.com.
“It is for this reason that the seasonal momentum usually seen at this time of year is absent,” continued the analyst. The market was trying on Thursday to “rediscover this positive spirit” which often marks the month of December and benefits equities.
The thinning was also favored, according to Art Hogan, by the strengthening of bond rates, which had sagged in recent days to reflect the apprehension of investors about a possible recession.
The yield on 10-year US government bonds stood at 3.49%, against 3.41% the day before.
The yield curve, which links the different debt maturities, nevertheless remains clearly inverted, which means that short rates are much higher than long rates.
This anomaly bears witness to the fear of a recession in the medium term.
In addition, underlines Art Hogan, this phenomenon penalizes banks, which often borrow in the short term on the markets but lend in the long term, mainly for mortgages.
“If they can’t make money, they’ll stop lending, which will slow the pace of the economy,” he argues.
Beyond the small rebound at the start of the session, “the market will go into a waiting position” before the publication of two highly anticipated US inflation indicators, producer prices (PPI) on Friday and consumer prices (CPI) on Tuesday, predicts Art Hogan.
At the rating, ExxonMobil was sought (+ 2.64% 106.39 dollars) after unveiling Thursday, a series of medium and long-term objectives. The oil company notably plans to buy back 50 billion dollars of its own shares by the end of 2024, which has attracted investors.
The Rent The Runway clothing rental platform was parading (+27.94% to $1.74) after the publication of quarterly sales that exceeded expectations. The service now has more than 176,000 subscribers.
Tesla continued its slide (-1.18% to 171.98 dollars), which has cut the title by nearly 12% since Friday. The decline was worth Elon Musk, boss of the car manufacturer, to yield, again, the first place in the ranking of world fortunes to the CEO of LVMH, the French Bernard Arnault.
Individual investors remained in support of GameStop (+6.03% to 23.60 dollars), the chain of video game stores that have become a symbol of “meme stocks”, these shares whose value was pushed by a wind of speculation at the start 2021.
However, the group published a larger loss on Wednesday than expected by analysts, the seventh consecutive quarterly result in the red.
Chinese stocks listed in New York were climbing, helped by the relaxation of health rules in China. E-commerce platforms Alibaba (+6.25%), JD.com (+3.54%) and Pinduoduo (+4.16%) led the charge.
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