(New York) The New York Stock Exchange ended in mixed order on Wednesday, with the Dow Jones benefiting from a rotation towards neglected stocks, in a wait-and-see market, due to lack of major news.
The Dow Jones gained 0.44%, recording a sixth positive session in a row. The venerable New York index is within reach of its historic closing record, recorded on March 28.
The NASDAQ index lost 0.18% and the broader S&P 500 index finished in balance.
In the absence of major indicators on the menu, “there is not much economic news to get your teeth into,” observes Jack Ablin of Cresset Capital. “It’s a quiet week, but the market remains on an upward trend. »
A sign of the low volatility on Wall Street, the VIX index, which measures operators’ anxiety, fell to its lowest level in six weeks.
The New York market was counting on company results to regain momentum, but the quarterly accounts have so far sparked mixed reactions.
“Companies managed to exceed expectations, but their forecasts for the entire financial year have not changed much,” emphasizes Jack Ablin. “Profits are not growing much. »
The bond market contributed to the general lack of enthusiasm, with renewed tension in rates. The yield on 10-year US government bonds stood at 4.49%, compared to 4.45% the day before at the close.
The Dow Jones benefited from cheap purchases to end up in the green, while the NASDAQ was weighed down by Tesla (-1.74%), Alphabet (-1.05%) or PayPal (-3.20). %).
Manhandled for weeks, Boeing was one of the chosen ones (+2.06%), like IBM (+0.90%) or Honeywell (+0.61%).
“The somewhat neglected names are starting to stand out, as investors position themselves while waiting for rate cuts and hunt for good deals,” according to Mr. Ablin.
Beyond the Dow Jones, Kyndryl (+27.83%), which brings together the former consulting and maintenance activities of IBM and HP (+3.63%), have also caught up.
Among the bad performers of the day, Uber (-5.72%), which published a loss greater than projected by the market, due, essentially, to depreciation of participations, unrelated to the group’s activity .
The turnover forecast for the current quarter also appeared moderate compared to that of analysts.
Tesla also fell (-1.74%), after announcing on Tuesday an 18% drop in its sales in China in April compared to the same period last year.
Wall Street trampled the online commerce platform Shopify (-18.59%), whose results were nevertheless higher than the expectations of the FactSet consensus, but which published a loss and announced to expect a deterioration in its margins for the current quarter.
Another target of investors, the hotel reservation platform Tripadvisor plunged 28.73%. The group reported a greater loss than investors expected and indicated that the committee responsible for identifying a possible buyer had failed.
After its first publication since its IPO at the end of March, the social network Reddit performed well (+4.05%), the turnover having surprised favorably, even if the losses widened and reached more than double the revenues. .
Taking the opposite view of its rival Uber, Lyft did well (+7.11%), after exceeding expectations and announcing more ambitious forecasts than expected, driven by strong demand.
S&P/TSX closes lower
PHOTO SEAN KILPATRICK, CANADIAN PRESS ARCHIVES
Shopify is the largest technology company on the TSX.
Shares of tech heavyweight Shopify fell nearly 19% on Wednesday, weighing on Canada’s main stock index, while U.S. markets were mixed.
The S&P/TSX Composite Index closed down 31.46 points at 22,259.16.
Shopify posted a loss in the first quarter despite an increase in revenue. The company also expects slower revenue growth in the next quarter.
Shopify is the largest technology company on the TSX and a significant weight in the index, points out Jennifer Tozser, senior wealth management advisor and portfolio manager at Tozser Wealth Management at National Bank Financial.
The company’s profits weren’t bad, but its prospects for future growth weren’t as rosy as investors had hoped, Ms.me Tozser.
Shopify is one of many companies that did well during the pandemic and is now wondering what its post-COVID future will look like, she says.
As Canada’s earnings season begins, Mme Tozser says he doesn’t expect many surprises.
“This is why Shopify is so unique […] because it is not a very developed sector in Canada,” she maintains.
The TSX Information Technology Index fell 4.2% on Wednesday, while most other sectors posted modest gains.
Profits have continued to flow south of the border as the American season draws to a close.
Uber Technologies saw its stock price fall after its results fell short of analysts’ expectations, while Lyft stock rose after beating expectations.
Mme Tozser believes markets will experience sector rotation as central banks begin to cut interest rates, which will favor companies in sectors such as industrials, consumer discretionary and real estate investment trusts.
In Canada, rate cuts could begin as early as June, with weak economic data forcing the Bank of Canada to relax its measures, says Mme Tozser.
In the United States, reductions are not expected until the end of the year.
This places the Bank of Canada in a difficult situation, according to Mme Tozser.
“The problem is if we cut and the United States doesn’t, we’re going to weaken our currency,” she says.
On the currency market, the Canadian dollar traded at 72.81 US cents compared to 72.97 US cents on Tuesday.
On the New York Mercantile Exchange, the price of crude oil jumped 61 cents to US$78.99 per barrel and the natural gas contract fell two cents to US$2.19 per thousand cubic feet .
The gold contract lost US$1.90 to US$2,322.30 an ounce and copper slipped seven cents to US$4.54 a pound.
The Canadian Press and the Associated Press