(New York) The New York Stock Exchange ended higher on Friday, less anxious about an economic slowdown and sensitive to the prospect of a possible deceleration in inflation, which could boost stocks by now. in earnings season.
Updated yesterday at 4:42 p.m.
The Dow Jones rose 2.68% to 31,500.68 points, the NASDAQ index rose 3.34% to 11,607.62 points and the broader S&P 500 index rose 3.07% to 3911.74 points.
Since its plunge last week, which had seen it fall to its lowest level in 18 months, the S&P 500 has regained more than 7%, and the NASDAQ, almost 10%.
“Stocks rose after an indicator showed inflation expectations were calming and also on the back of upbeat comments from (Fed St. Louis branch chairman James) Bullard on the economy” , explained, in a note, Edward Moya, of Oanda.
The final version of the University of Michigan survey for June showed that respondents had revised their one-year inflation forecast slightly downwards, to 5.3% from 5.4%.
Expectations in the 5 to 10 years are down to 3.1%, against 3.3% previously.
As for James Bullard, the leader felt on Friday that it was “a bit early to debate the likelihood of a recession in the United States”. “In fact, I think it will pass” and that we will avoid this scenario, he explained.
To these two elements, Tom Cahill of Ventura Wealth Management added new home sales in May, which came out well above expectations. “It’s good to see a figure higher than expected,” said the analyst, while the latest US macroeconomic indicators have been bad for the most part.
“The hope that inflation is at a peak and that the economy remains solid encourages investors to buy stocks that have fallen significantly,” according to Edward Moya. “It looks like Wall Street is starting to believe that even if the economy goes into a recession, it will be brief. »
“Home sales support the idea that the economy is not slowing down that badly,” said Tom Cahill. “Investors are thinking maybe the Federal Reserve can pull off a soft landing. »
“The momentum this week, so close to the earnings season, shows the hope of seeing generally positive forecasts” for the quarters to come, during the publications of companies, argued, in a note, Louis Navellier, from Navellier & Associates.
“If this materializes, we could, one day, realize that last week was a low point of the year” for the indices, he advanced.
“For me, expectations [des analystes] are too high” for the results to come, tempered Tom Cahill. “During the next two quarters, analysts will start to lower them”, to take into account the loss of momentum of the economy.
Publications next week from Nike, the Bed Bath & Beyond homeware chain or the Walgreens Boots Alliance pharmacy group should give some clues about the coming season, which won’t really start until mid-July. .
On Friday, on the stock exchange, the direction was given by the Wall Street giants, whether Apple (+2.45%), Amazon (+3.58%), Tesla (+4.52%) or Meta ( +7.19%).
The session was also animated by a hunt for bargains, which notably benefited cruise lines, such as Carnival (+ 12.44%) or Royal Caribbean (+ 15.77%).
Despite quarterly results slightly below expectations, FedEx (+7.16% to $243.24) was sought Friday after reporting better than expected forecasts for its 2022/23 fiscal year (June to May).
The group is supported by tariff increases as well as by the dynamism of its freight activity.
Swedish premium electric vehicle maker Polestar had a hesitant debut on the NASDAQ (+0.15% to $13.00), on its first day of trading after its merger with listed vehicle Gores Guggenheim.
The Seagen biotech (+ 3.06% to 179.33 dollars), specializing in the treatment of cancer, continued to benefit from the interest of the Merck laboratory, which would have advanced in its approach work for an acquisition , according to the Wall Street Journal.