Stock market: Wall Street reassured by the Fed

(Photo: Getty Images)

MARKET REVIEW. The New York Stock Exchange ended higher on Thursday, reassured by the words of the president of the American central bank (Fed), an easing in the bond market and rather solid company results.

The Toronto Stock Exchange, for its part, rose by more than 90 points.

To (re)consult market news

Stock market indices at closing

In Toronto, the S&P/TSX rose by +94.67 points (+0.44%) to 21,823.22 points.

In New York, the S&P 500 rose by +45.81 points (+0.91%) to 5,064.20 points.

THE Nasdaq advanced +235.48 points (+1.51%) to 15,840.96 points.

THE DOW rose by +322.37 points (+0.85%) to 38,225.66 points.

THE loon rose by +US$0.0020 (+0.27%) to US$0.7319.

THE oil gained +US$0.03 (+0.04%) to US$79.03.

Gold took +US$1.70 (+0.07%) to US$2,312.70.

THE bitcoin rose from US$1,557.92 (+2.72%) to US$58,843.66.

Context

“Investors breathed a sigh of relief, because the Fed Chairman [Jerome] Powell said a rate hike was unlikely,” CFRA’s Sam Stovall said of Wednesday’s press conference.

A small jump in inflation in March, to 3.5% over one year, had made some investors fear that the Federal Reserve would decide to tighten the screw on rates further to bring prices back into line.

“Even if he [Powell] reminded us that the Fed would make its decision based on macroeconomic data, he also indicated that he still expected inflation to come down and rates to fall,” added Sam Stovall.

Wall Street also welcomed the decision of central bankers to slow down the reduction of the Fed’s balance sheet. This will significantly reduce the volume of Treasury bills that the market must absorb each month to replace the Fed.

“It’s a bit like having lowered rates, because it takes pressure off the bond market, which will also benefit stocks,” according to Sam Stovall.

The yield on 2-year American bonds thus suddenly relaxed, to 4.87%, compared to 4.96% the day before at closing.

This decline and the prospect of a reduction in Fed rates, even if the deadline is uncertain, initially benefited the technology sector, which took off again at full speed, like Nvidia (NVDA, +3.34% to US$858.17), Amazon (AMZN, +3.20% to US$184.72) or Apple (AAPL, +2.20% to US$173.03), the results of which were expected after the close.

But the movement has spread well beyond, notably to so-called cyclical values, that is to say sensitive to the economic situation, such as Walt Disney (DIS, +1.95% to US$112.62) or Nike (NKE, +2.31% to US$92.41).

A rare phenomenon, the Russell 2000 index, which brings together the smallest capitalizations in the New York market, did better (+1.72%) than the three stars of the rating, Dow Jones, Nasdaq and S&P 500.

The film and television group Paramount Global sprang up (PARA, +13.05% to US$13.86) after the Wall Street Journal reported a $26 billion buyout offer jointly made by asset manager Apollo Global Management and Sony.

When asked, Sony declined to comment.

The semiconductor manufacturer Qualcomm had the wind in its sails (QCOM, +9.74% to US$180.10), after the publication of results and forecasts beyond expectations. The San Diego (California) company was notably supported by sales to the automotive sector.

The electric vehicle manufacturer Rivian left with its feet on the ground (RIVN, +6.73% to US$9.83), after revealing that the State of Illinois was going to release an envelope of 827 million dollars to allow the group to expand its factory Normal (Illinois).

The laboratory Moderna (MRNA, +12.68% to US$125.59) despite a turnover lower by 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 vehicle rental company Notice surfed (CAR, +20.07% to US$113.77) 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 meal delivery platform DoorDash (DASH, -10.32% to US$114.31) may have posted growth above projections and a significantly reduced loss compared to the same period last year, but Wall Street kept its forecasts in mind for the current quarter, considered disappointing.

Subscribe to our thematic newsletter:

Personal Finance — Every Friday

Get inspired by the advice of our financial planning experts and all the news that may affect the management of your wealth.

-

-

PREV TGF: big promises for users, but big risks for VIA Rail
NEXT Analyst opinions of the day: Renault, Legrand, Orange, Nexans, Soitec, Julius Bär, Wizz Air…