(New York) The New York Stock Exchange ended sharply higher on Friday, boosted by employment figures preserving the hypothesis of a soft landing for the American economy, as well as by a jump in regional banks.
The Dow Jones rose 1.65%, the NASDAQ index rose 2.25% and the S&P 500 index rose 1.85%.
After four consecutive bearish sessions, the market was ready for a rebound and relied on the monthly US jobs report to get going.
Some 253,000 jobs were created in April in the United States, much more than the 180,000 announced by economists. The difference with the forecasts was put into perspective by the sharp downward revision of the two previous months (-149,000 in total).
The three-month average fell from 333,000 in January to 222,000 currently. “So clearly the labor market is still robust, but it’s cooling,” commented Art Hogan of B. Riley Wealth Management.
“The (macroeconomic) figures of the day, with the rebound of the regional banks, brought relief to the fact that the current state of the economy is not that of a recession”, observes Angelo Kourkafas, of Edward Jones. “We are not even at a turning point. »
On the banking front, confidence returned on Friday as it had disappeared, without warning, during another difficult week for regional establishments.
Presented as the last weak link to date, the Californian PacWest thus almost doubled in value during the session (+81.70%), which also saw the sign of Phoenix (Arizona) Western Alliance recover (+49.23 %), as well as that of Salt Lake City (Utah) Zions (+19.22%).
The momentum benefited the biggest American banks, such as Wells Fargo (+3.32%) or Citigroup (+3.16%).
The operators nevertheless noted, in the employment report, that the average salary had increased faster than expected (+0.5% against +0.3%) over one month.
“The report underlines that even if the Fed (US central bank) signaled a pause (in its communication on Wednesday), further rate hikes cannot be ruled out if job creation and wage growth do not moderate. not, with inflation”, warned, in a note, Oxford Economics.
The prospect of inflation that is slow to return to the nails has played on bond rates, which have risen. The yield on 10-year US government bonds stood at 3.42%, against 3.37% the day before closing.
Wall Street was also well oriented by the results of Apple (+4.69%), Thursday after the stock market, which carried the giant at the apple and a good part of the technology sector with it.
The Cupertino (California) firm recorded a second consecutive decline in its turnover, but exceeded market expectations, mainly thanks to its star product, the iPhone, which now accounts for 54% of group sales. Apple also announced a new share buyback program of up to $90 billion.
Chauffeur-driven vehicle reservation platform Lyft slowed (-19.27%) after reporting forecasts below analysts’ projections, despite a better-than-expected first quarter.
Entertainment group Warner Bros Discovery fell (-4.54%) after reporting lower than expected revenue and a surprise loss. The Burbank (California) company suffered from a slowdown in content sales and advertising. Note, however, that online distribution has reached profitability.
The Coinbase cryptocurrency exchange platform soared (+18.33%), thanks to quarterly results above expectations, in a context deemed unfavorable to digital currencies.
The e-commerce site Shopify also shone (+8.25%), after the announcement of better than expected quarterly activity figures, but also the dismissal of 20% of the workforce, less than a year after a first social plan which had cut 10% of jobs.
The Toronto Stock Exchange
The Toronto Stock Exchange climbed more than 300 points on Friday, boosted by the energy, base metals and information technology sectors, while the major US stock indexes also rose.
The Toronto floor’s S&P/TSX Composite Index jumped 303.84 points to close the session with 20,542.03 points.
Regional U.S. banks helped lead the rally south of the border, which spilled over into Canada, observed Tamsin Wilding, fixed-income analyst at Leith Wheeler.
But that’s not the only element that ended a turbulent and volatile week on a high note, she added. Employment data in Canada and the United States came in better than expected, fueling investor relief at the possibility of a soft landing.
The US labor market added 253,000 jobs in April, while the Canadian economy added 41,400.
“This really caps off a week of data that accentuates what the (Federal Reserve) keeps saying, which is that growth is only slowing slightly,” Ms.me Wilding.
“I think it’s the resilience of growth, and it alleviates fears that things won’t end in an outright collapse. »
Shares of Apple also supported markets on Friday as the tech company reported better-than-expected results. Its share price rose 4.7%.
Oil prices rebounded above the US$70/barrel mark after falling lower this week on economic uncertainty, helping the TSX rise. Toronto’s energy sector advanced 3.3%.
The finance sector is likely to continue to dominate the narrative next week, Ms.me Wilding, as well as investors’ continued focus on the broader economic picture.
“The market will continue to watch economic data very closely, given that the Fed has implied a reliance on data at this time,” she said, adding that hypersensitivity to economic data releases was a major feature of the markets lately.
In the currency market, the Canadian dollar traded at an average rate of 74.48 cents US, up from 73.71 cents US on Thursday.
On the New York Commodities Exchange, crude oil rose US$2.78 to US$71.34 per barrel, while natural gas rose 4 cents to US$2.14 per million. of BTUs.
The price of gold fell US$30.90 to US$2024.80 per ounce and that of copper rose 2 cents US to US$3.88 per pound.
The Canadian Press