Wall Street enjoys another good surprise on inflation

(New York) The New York Stock Exchange opened higher on Thursday, driven by a new US price indicator that points to a slowdown in inflation, as well as by communications from companies deemed encouraging.




Around 9:50 am (Eastern time), the Dow Jones gained 0.25%, the NASDAQ index gained 0.97% and the broader S&P 500 index, 0.54%.

The S&P 500 was close to the symbolic threshold of 4,500 points, which had not been reached for 15 months. The NASDAQ was at its highest since early April 2022.

The day had started on a first ray of sunshine, with the publication of the producer price index (PPI), which rose by only 0.1% in June over one month, against 0.2% expected by the economists.

This is a new signal of cooling inflation, after the CPI consumer price index also came out on Wednesday below expectations and at its lowest since March 2021.

“Whether on the production or consumption side, inflation continues to slow down”, commented Peter Cardillo, of Spartan Capital, for whom it is no longer incongruous to consider a continuation of the monetary status quo of the American central bank (Fed ) in July, when the market had so far taken a rise for granted.

These factors boosted the bond market. The yield on 2-year US government bonds eased sharply, to 4.64%, against 4.74% the day before closing.

“For investors, this means it’s time to buy stocks and bonds, unlike last year when the two fell in concert,” said Chris Zaccarelli of the Independent Advisor Alliance.

The New York market was also stimulated by the first major publications of the earnings season.

The giant of sodas and snacks PepsiCo (+0.69%) reported results well above expectations and raised its annual forecast. The group from Purchase (State of New York) was driven by price increases which enabled it to compensate for the stagnation or even a fall in its volumes in several regions.

The market also welcomed the publication of Delta Air Lines (+0.86%), which clearly exceeded forecasts and revised its annual forecasts upwards. “Demand for air travel remains strong,” Chief Executive Ed Bastian said.

“During the earnings season, forecasts will be key” for investors, who will be able to project themselves towards the end of the year and beyond, explained Peter Cardillo.

After a stabilization phase, the giant capitalizations of Wall Street, all from the technology sector, started up again, whether Alphabet (+3.06%), Amazon (+2.38%) or Nvidia (+2, 24%).

Elsewhere on the stock market, Disney (-0.44%) did not benefit from the announcement of the extension of the contract of general manager Bob Iger, to which the board of directors has added two additional years, until the end of 2026. The septuagenarian took over the controls in November and reoriented the entertainment group’s strategy with an emphasis on financial orthodoxy.

Meta remained well oriented (+1.44%), after reaching its highest level in 18 months on Wednesday. According to several media, the company headed by Mark Zuckerberg is about to open access to its so-called generative artificial intelligence interface, LLaMA, to the general public.

The Perrigo laboratory jumped (+4.73%) after the green light from the American Medicines Agency, the FDA, for the marketing in the United States of the first contraceptive pill without a prescription, called Opill.

Oil giant ExxonMobil fell (-1.72%) after revealing the acquisition of the CO capture specialist2 Denbury (-0.93%), valued at $4.9 billion.


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