(New York) The New York Stock Exchange opened on a mixed note on Friday, encouraged by the confirmation of the moderate slowdown in the employment market, which further increases the probability of a rate cut by the American central bank (Fed).
By 10 a.m., the Dow Jones was down 0.06%, the NASDAQ index was up 0.47% and the broader S&P 500 index was up 0.15%.
The most anticipated event of the session, sandwiched between a public holiday (National Day on Thursday) and a weekend, was the Labor Ministry’s monthly employment report.
It showed that the US economy created 206,000 jobs in June, more than economists had predicted (190,000).
This small upward surprise was offset by the downward revision of 111,000 job creations during the months of April and May, as well as by the acceleration of the unemployment rate, to 4.1% against 4.0% previously.
“Although this rate shows that the labor market remains resilient, the trajectory [du taux de chômage] “is asserting itself” upwards, commented Quincy Krosby, of LPL Financial.
“This is in line with the latest indicators,” notably the activity indices in the manufacturing and services sectors, which each showed a contraction, the analyst stressed.
“That’s why the stock market is gaining ground, because it thinks the Fed is going to have to cut rates more than once” this year, she added.
Investors now assign a 72% probability to the scenario including two cuts by the American central bank by the end of 2024, in September and then in December.
As recent statements by several of them have shown, Fed members “are more attentive to the employment risks” posed by high interest rates for a prolonged period, Nancy Vanden Houten of Oxford Economics said in a note.
Bond rates reacted much more sharply than the stock market. The yield on 2-year US government bonds fell to 4.62%, its lowest in three months, from 4.70% the previous day.
In addition to the fact that the NASDAQ and S&P 500 are still on a series of records and that the market is running out of steam, the measured reaction of the stock market is also due to investors’ vigilance regarding a possible sharp decline in American economic activity.
“There is concern,” says Quincy Krosby. “The question is whether it will turn into worry.” […] Fed wants cooling [de l’économie]but not a glaciation.”
On the stock market, as on many occasions over the past 20 months, artificial intelligence (AI) stocks were driving the NASDAQ and the S&P 500, while the Dow Jones was marking time.
Meta (+2.50%), Alphabet (+1.97%) and semiconductor specialists AMD (+2.54%) and Arm (+6.36%) stood out in particular.
Tesla remained on an upward trend (+0.99%), still driven by better-than-expected quarterly sales and the prospect of the presentation of its robot taxi on August 8.
For analysts at Wedbush Securities, the automaker “is the most undervalued artificial intelligence (AI) stock on the market.”
Macy’s was gaining ground (+9.96%), based on information from Wall Street Journalaccording to which the two investment firms Arkhouse Management and Brigade Capital Management have again raised their offer for the department store chain, now valued at $6.9 billion.
Bitcoin fell to its lowest level in four months on Friday, dragging down most of the sector’s stocks, such as miners (cryptocurrency creators) Marathon Digital Holdings (-5.29%) and Riot Platforms (-3.03%), digital currency exchange platform Coinbase (-4.89%) and brokerage site Robinhood (-3.01%).