(Photo: 123RF)
MARKET REVIEW. The New York Stock Exchange closed sharply higher on Tuesday, allowing the Nasdaq to reach a new record, while awaiting key indices on inflation and consumption in the United States.
To (re)consult market news
Stock market indices at closing
In Toronto, the S&P/TSX decreased by -15.83 points (-0.07%) to 22,243.34 points.
In New York, the S&P 500 rose by +25.46 points (+0.49%) to 5246.88 points.
THE Nasdaq rose by +119.60 points (+0.73%) to 16,507.84 points.
THE DOW increased by +135.51 points (+0.34%) to 39,567.02 points.
THE loon was in equilibrium at US$0.7316.
THE oil dropped -US$0.98 (-1.24%) to US$77.14.
L’gold rose +US$18.90 (+0.81%) to US$2,361.90.
THE bitcoin fell by -US$1,705 (-2.69%) to US$61,775.
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Investors brushed off the mixed data released on US wholesale prices in April which rose more than expected, just before the release of the CPI consumer price index on Wednesday.
Producer prices (PPI index) accelerated more quickly than the markets anticipated, to +0.5% over the month compared to -0.1% in March (figure revised downward) and +0.3% foreseen.
The market kept its cool in the face of this rise in producer prices, driven by energy and services, because it focused on the fact that the data for the month of March was revised downward, compensating for the April acceleration.
“The numbers were stronger than expected, but so were the revisions. So when you add the two together, we land pretty much where we need to be,” commented Steve Sosnick of Interactive Brokers. “The data was therefore more or less in line with expectations,” he summarized.
Expected on Wednesday before the market opens, the CPI consumer price index for April should settle for the month at +0.4% compared to +0.3%, according to analysts.
Investors will also be watching the performance of retail sales for April, a good way to assess the health of the consumer, the engine of the American economy.
The bond market remained calm, yields, which move in the opposite direction to bond prices, relaxed, which favored stocks.
Ten-year rates fell to 4.44% from 4.48% the day before.
Jerome Powell, Chairman of the Fed, also remained calm regarding the acceleration in wholesale prices.
“We didn’t expect it to be easy, but the numbers have been higher than anyone anticipated,” he commented at a conference in the Netherlands. “What this tells us is that we need to be more patient and let the restrictive policy take effect.”
On the value side, the frenzy around viral action (“meme stock”) GameStop (GME) continued for the second session in a row.
The title of video game stores soared 62.40% to 49.45 US dollars ($US), driven by speculation by small investors as during the turbulence on Wall Street in 2021.
“It’s like an animal waking up unexpectedly after hibernation,” commented Steve Sosnick. “These movements are completely disconnected from anything fundamental, they are very speculative and very dangerous. The profit potential exists and this is what this leads to,” he added.
Then followed the usual suspects such as cinema titles AMC (AMC, +30.98% to US$6.85) or even BlackBerry (BB, +11.82% to US$4.73). These actions had already been part of the rebellion at the beginning of 2021 by small online investors against investment funds, which bet downward on companies with an uncertain future.
AMC also benefited from being able to raise US$250 million in new money by selling new shares, according to a document filed with SEC securities regulators on Monday.
Electric vehicle manufacturers have had the wind in their sails, You’re here (TSLA, +3.29% to US$177.55) Rivian (RIVN, +2.66% to US$11.19) as the Biden administration will impose additional customs duties on US$18 billion worth of Chinese technology products, including electric cars and batteries.
For his part, Alphabet (GOOGL) closed up 0.60% at US$171.93 despite the opening of an investigation by the road safety authority into its Waymo autonomous electric taxis, after several incidents. On Tuesday, the CEO of Google presented his latest innovations in artificial intelligence, without triggering the enthusiasm of investors.
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