Stock market: Wall Street opens higher, mood remains positive after the Fed

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MARKET REVIEW. The New York Stock Exchange opened higher on Thursday, maintaining its good mood after the communication on Wednesday from the American central bank (Fed), which ruled out the hypothesis of a rate increase and the idea of ​​a entry into stagflation.

The main Canadian stock index was up at midday, helped by gains in industrial and energy stocks.

To (re)consult market news

Stock market indices at noon

In Toronto, the S&P/TSX rose by +67.48 points (+0.31%) to 21,796.63 points.

In New York, the S&P 500 rose by +19.81 points (+0.39%) to 5,038.20 points.

THE Nasdaq advanced +127.08 points (+0.38%) to 15,733.09 points.

THE DOW rose by +143.16 points (+0.31%) to 38,047.53 points.

THE loon rose by +US$0.0005 (+0.08%) to US$0.7304.

THE oil lost -US$0.25 (-0.32%) to US$78.75.

Gold fell by -US$1.50 (-0.06%) to US$2,309.50.

THE bitcoin rose from US$1,741.38 (+3.04%) to US$59,062.42.

Context

For Quincy Krosby of LPL Financial, the New York market maintained its upward trend, rather satisfied with the statements of Fed President Jerome Powell the day before.

“He said a rate hike was ‘unlikely’ and that was very important for the market,” the analyst explained, “because some believe it is necessary to raise rates further […] to slow down the economy” and curb inflation.

For Quincy Krosby, Wall Street has also been sensitive to comments relating to stagflation, which is generally characterized by low growth and high inflation.

The recent growth figure for the first quarter in the United States, coming out at 1.6% at an annualized rate compared to 2.5% announced by economists, has prompted several analysts to speak of a risk of stagflation in the American economy. .

But the Fed president brushed aside the hypothesis, saying that growth remained sustained and that inflation, even if stubborn, had fallen significantly since its peaks two years ago.

For Quincy Krosby, the Federal Reserve has also given new color to the New York market by announcing a slowdown in the program to reduce its balance sheet (quantitative tightening).

It will thus hold more Treasury bills than expected, which will reduce the quantity of American bonds that the market must absorb.

The yield on 10-year US government bonds was stable on Thursday at 4.62%.

Is popular, Amazon remained on course (AMZN, +1.58%), after its good results on Tuesday.

After the publication of results lower than expectations, the specialist in exercise bikes and connected treadmills Platoon stalled (PTON, -6.52%). The company also announced the departure of its managing director, Barry McCarthy, and a social plan which will lead to the departure of around 15% of the workforce, or around 400 people.

The sales platform for furniture and decorative items Wayfair was levitating (W, +12.52%), thanks to better-than-expected accounts and comments from CEO Niraj Shah, who noted an acceleration in demand at the end of the quarter.

The sound of the bell was different at Etsy (ETSY, -16.43%), which missed the target set by analysts and cited “a difficult environment” for non-essential products.

The vehicle rental company Notice capitalized (CAR, +16.59%) on a higher turnover than the market saw. The loss was also higher than anticipated, notably due to significant depreciation linked to the reduction of its fleet.

The laboratory Moderna was in the green (MRNA, +7.39%) despite a lower turnover of more than 90% over one year. Investors saw the net loss as lower than expected, in particular thanks to the control of fixed costs.

The Cambridge (Massachusetts) group is awaiting the green light from the American Medicines Agency (FDA) for its vaccine against respiratory syncytial virus (RSV), which should allow it to boost its revenues, which were sharply contracted after the outbreak of the pandemic. of coronavirus and mass vaccinations.

The meal delivery platform DoorDash (DASH, -13.71%) may have posted growth above projections and a significantly reduced loss compared to the same period last year, but Wall Street kept in mind its forecasts for the current quarter, judged disappointing.

The semiconductor manufacturer Qualcomm had the wind in its sails (QCOM, +8.92%), after the publication of results and forecasts beyond expectations. The San Diego (California) company was notably supported by sales to the automotive sector.

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