Fed in no hurry to raise rates | Wall Street closes on records

(New York) The New York Stock Exchange ended sharply higher on new records Wednesday, relieved by the Fed which seems in no hurry to raise rates, even if, as expected, the US Central Bank restricts its monetary support.

According to final results at the close, the Dow Jones index hung a new record at 36,157.58 points (+ 0.29%) as did the NASDAQ which jumped 1.04% to 15,811.58 points and the S&P 500 at 4,660.57 points (+ 0.65%).

The Russell 2000 Small Cap Index also hit a record high, ending at 2,404.28 points, up 1.80%.

Wall Street had started the session on tiptoes, until the end of the monetary meeting of the American Central Bank (Fed), in the early afternoon. The indices then went into positive territory with the confirmation of the Fed’s plans.

The U.S. Federal Reserve announced a $ 15 billion monthly cut in asset purchases, to complete these cash injections by mid-2022.

Jerome Powell, the boss of the Fed, indicated that the central bank could be “patient” before raising interest rates and that inflation, admittedly “high”, was driven by factors “which should be temporary” .

“Given the inflation rhetoric, the tone is more accommodating than expected and confirms our view that the Fed will not start raising interest rates until early 2023,” commented Paul Ashworth, economist for Capital. Economics.

In the bond market, however, the rates on 10-year Treasury bills rose to 1.5772% from 1.5488%.

No surprise

For LLBW’s Karl Haeling, “the Fed’s decision was largely anticipated and the market’s reaction shows that he was not afraid”. “No surprise then and, moreover, the indicators of the day were solid,” added the analyst.

Among them, job creation in the private sector rose sharply in the United States last month, far exceeding expectations.

In October, 571,000 private jobs were created, according to the monthly survey by the business services firm ADP.

This survey normally portends strong hires in official figures which are expected on Friday. Private and public sectors combined, 400,000 job creations are expected while the unemployment rate is expected to decline very slightly, to 4.7% against 4.8% in September.

Among stocks, chauffeur-driven car rental company Lyft reported a sharp increase in third-quarter earnings. The group reported a tripling of trips to airports and welcomed the return of travel habits. The stock rose 8.19% to 49.03 dollars. That of its competitor Uber followed (+ 6.53% to 45.69 dollars).

Several actions displayed extreme changes reminiscent of the episode of viral actions like those of GameStop which had destabilized Wall Street at the beginning of the year.

The action of the home equipment chain Bed Bath and Beyond, which was already a title that excited online stock marketers, but which was also the subject of downside bets (short) by investors, climbed 15.22% to $ 19.30. The brand has announced a distribution partnership with Kroger supermarkets.

The car rental company Avis, whose listing had been interrupted several times the day before because of hypervolatile, fell 16.54% to 298.09 dollars.

The car rental group reported spectacular results in the third quarter with the resumption of travel and price increases.

Another example of these extreme moves was the US real estate listing site Zillow. The share fell 24.92% to 65.47 dollars after the group announced to end its activity of buying and reselling real estate and the dismissal of a quarter of its workforce.