(New York) The New York Stock Exchange ended higher on Thursday and managed to chain a second session in the green, supported by financial stocks and less apprehension of inflation.
Updated yesterday at 4:58 p.m.
The Dow Jones gained 0.61%, to 31,774.52 points, the NASDAQ index gained 0.60%, to 11,862.12 points, and the broader S&P 500 index, 0.66%, to 4006 .18 points.
“The gains are more moderate than yesterday, but the fact that the market was able to build on yesterday’s gains is significant,” commented Quincy Krosby of LPL Financial, “particularly considering the message (from the Chairman of the US central bank Jerome) Powell this morning. »
In an exchange hosted by think tank Cato Institute on Thursday, the Fed Chairman warned of a “premature easing” of central bank monetary policy, which could jeopardize the fight against inflation, a priority of the institution.
The Fed must act “strongly” against inflation so as not to repeat the scenarios of the 1980s, the official warned.
While the European Central Bank (ECB) raised its key rate by 0.75 percentage points on Thursday, a first, operators are more than ever convinced that the Federal Reserve (Fed) will do the same at its next meeting of the September 21 and 22.
They assign this option a probability of 86%, according to the model of the American stock exchange CME, based on futures contracts.
After opening in the red, Wall Street recovered, driven in particular by financial stocks, whether JPMorgan Chase (+2.32%), Bank of America (+3.23%) or Wells Fargo (+3.15%).
For Quincy Krosby, the sector may have benefited from the feeling that the end of the cycle of Fed rate hikes is approaching. The operators are thus counting on a stabilization of the main key rate of the institution during most of 2023.
Nick Reece, of Merk Investments, retained him the new fall of the anticipations of inflation, illustrated by the fall of the “breakeven rate”, difference between the rate of bonds indexed on inflation and the yield of ordinary bonds of the same maturity.
This spread is meant to reflect investors’ expectations for price action. On Thursday, it hit its lowest level since late July for 10-year bonds.
The yield on 10-year US government bonds has recovered to 3.31%, against 3.26% the day before.
The New York market is, like the Fed, focused on inflation, insists Nick Reece, and is therefore firmly awaiting the publication on Tuesday of the CPI index for August, which should provide information on the trajectory of prices in United States.
Thursday, new jobless claims posted a further decline in the United States, to 222,000 job seekers, quite significantly below the 235,000 expected by economists.
“This suggests that the labor market and the US economy remain resilient,” concluded Nick Reece. “So a recession still doesn’t look imminent. It’s more of a risk for 2023.”
On the side, the manufacturer of electric vehicles Rivian offered a burst of speed (+ 10.92% to 36.88 dollars) after the announcement of a partnership with the German Mercedes-Benz which provides for the joint production of electric vans in Europe.
The news lifted the entire industry, from Tesla (+1.96%) to Lucid (+1.97%).
In addition to banking, Wall Street was also driven by health, in particular the Pfizer (+2.06%) and Moderna (+4.73%) laboratories. Value of the sector, Regeneron did even better (+18.85% to 708.85 dollars) after the publication of encouraging clinical results for its treatment against eye diseases, Eylea.
The listed Digital World Acquisition Copr (DWAC), which is to merge with the former US president’s Trump Media and Technology Group (TMTG), gained 1.21% to $23.35, pending definitive information.
Shareholders are called upon to validate the postponement of the merger deadline, failing which DWAC could dissolve and deprive Donald Trump of an injection of fresh money.
The hydrogen fuel cell manufacturer Plug Power was praised (+6.01% to 29.12 dollars) after the announcement of a large order from French Lhyfe, for ten electrolysers with a total capacity of 50 megawatts.