(New York) The New York Stock Exchange ended on the wire in the green on Friday an undecided session, made volatile by expiry of options and gloomy economic indicators.
The Dow Jones index advanced 0.59% to 33,745.69 points, the tech-heavy NASDAQ gleaned 0.01% to 11,146.06 points and the broader S&P 500 index 0.48% to 3695.34 points, according to final results.
For Edward Moya of Oanda, “US equities behaved as if they were already dormant for Thanksgiving week and market moves were uninspired as little new was learned.”
Next week will be shortened for the financial markets in the United States with the traditional Thanksgiving holiday on Thursday.
A technical factor weighed on the lack of trend, with the expiration of many options at the end of the day, also underlined Peter Cardillo, of Spartan Capital.
Over the week, the NASDAQ fell again (-1.5%) as did the S&P 500 which dropped almost 1%.
“We also had the publication of indicators that were negative, such as the leading economic indicator and sales of existing homes. All of this points to recession,” added the Spartan Capital analyst.
Home resales in the United States fell sharply in October, falling for the ninth month in a row, depressed by the rise in interest rates on mortgages.
Nine consecutive months of decline is the longest decline in sales of existing homes recorded by the National Federation of American Realtors (NAR).
Last month, 4.43 million houses and apartments changed owners at an annualized rate, 5.9% less than in September, and 28.4% less than a year ago at the same time , the Federation announced on Friday.
As for the advanced economic index designed by the Conference Board, it fell by 0.8% in October, more than expected, after an initial decline of 0.5% in September and already seven consecutive declines, seeming to diagnose that the US economy is already in recession.
“With inflation still high, the Fed rapidly tightening monetary policy and a weakening of corporate accounts, the risks of a recession in 2023 are increasing,” commented Gurleen Chadha of Oxford Economics.
But for Peter Cardillo, the stock market indices “did not perform so badly given this environment”.
Especially since investors managed to ignore comments made earlier by several Central Bank (Fed) officials on Friday, suggesting that the rate hikes were far from over.
The president of the Fed of Saint Louis (Missouri) suggested on Thursday “that the rates on the federal funds could have to go up to between 5% and 7%”, whereas they are between 3.75% and 4% after a series of already severe monetary tightenings, recalled analysts at Wells Fargo.
Several retailers announced better than expected results such as the clothing brands GAP (+7.40%), Ross Stores (+9.86%) or Foot Locker (+8.64%).
Almost all of the S&P sectors except energy (-0.90%) and communication services (-0.35%) closed in the green.
That reassured investors as lackluster results from retail chain Target earlier in the week dampened prospects for consumer sentiment and dampened market sentiment, noted Briefing.com’s Patrick O’Hare.
Tesla dropped 1.63% as its leader Elon Musk continued the restructuring of Twitter, which was suffering a cascade of staff departures.
Electric vehicle manufacturers Rivian (-5.39%) and Lucid (-1.65%) also fell into negative territory.
In the bond market, yields on Treasury bills resumed their upward path to 3.82% from 3.76% around 4:20 p.m.
In Canada
The strength of the telecommunications and industrial sectors enabled the Toronto Stock Exchange to close up nearly 100 points on Friday, while the major American indices also climbed.
The Toronto floor’s S&P/TSX Composite Index gained 96.33 points to end the session with 19,980.91 points.
In the currency market, the Canadian dollar traded at an average rate of 74.71 cents US, down from 74.91 cents US on Thursday.
Investors are at a crossroads right now, said Allan Small, senior investment advisor at iA Private Wealth Management. The Federal Reserve is continuing its hawkish messages about interest rate hikes and inflation, but the quarterly corporate earnings season that is winding down has delivered better news than expected for many. sectors.
Sentiments are mixed, observed Mr. Small, and as a result investors are in wait-and-see mode.
“Everyone is trying to figure out whether or not we’re going to see growth next year, whether or not economies will go into recession in the first half of next year,” he said.
After weeks of market volatility showing sharp swings in reaction to new data, markets are now in a waiting pattern, he noted.
Mr Small worries that central banks seem determined to keep raising rates, when much of the current inflationary pressure comes from factors such as food and gasoline, which have been affected by a wide variety of issues such as the Russian-Ukrainian war and China’s severe restrictive measures against COVID-19.
For example, the price of oil fell again on Friday on worries about future demand amid economic uncertainty, including worries about containment policies in China as COVID-19 cases rise.
The Canadian Press