Wall Street ends up, the TSX down

(New York) The New York Stock Exchange ended higher on Monday, building on its momentum at the start of a truncated week and stimulated by the appointment of a financier appreciated by Wall Street to take the reins of the US Treasury.

The Dow Jones gained 0.99% and recorded a new closing record, while the NASDAQ index gleaned 0.27% and the broader S&P 500 index 0.30%.

“There was relief after this choice for the Treasury which reassured the market,” commented Angelo Kourkafas of Edward Jones.

President-elect Donald Trump announced Friday that he plans to nominate Scott Bessent as Treasury secretary once he is inaugurated.

This sixty-year-old spent nearly 15 years alongside financier George Soros, before creating his own investment company, Key Square Group, a career that made him a man in the inner circle on Wall Street.

For Will Compernolle, of FHN Financial, Scott Bessent will “lead the Treasury with a steady hand”.

Operators have thus calmed their apprehension of seeing a candidate ready to increase the debt, which would be likely to revive inflation, explains Angelo Kourkafas.

Scott Bessent has already indicated that he wants to reduce the United States budget deficit, while continuing the tax cuts implemented by the first Trump government and which expire in 2025.

The bond market reacted brutally to this development. The yield on 10-year US government bonds fell to 4.27%, compared to 4.40% at Friday’s close.

Operators have revised their expectations in terms of monetary policy and are now counting on a central scenario including at least three additional rate cuts from the American central bank (Fed) by the end of 2025, compared to two on Friday.

This relaxation of bond rates “helped stocks”, underlined Angelo Kourkafas.

On Monday, trading volumes began to decline, at the start of the week which will see the market closed on Thursday, the Thanksgiving holiday, and a half-day of trading on Friday.

“We don’t expect anything this week that could change the positive mood of the market,” described Angelo Kourkafas, for whom the publication of the PCE consumer price index on Wednesday should do little to shake up the New York market. .

“We already had the clues [de prix à la consommation] ICC and [à la production] PPI [pour le même mois] October,” he recalls, “so analysts know what to expect” for the PCE.

In addition to the appointment of Scott Bessent, the day was focused on bargain hunting and some profit taking.

Incandescent in recent weeks, the semiconductor giant Nvidia (-4.18%) and the electric vehicle manufacturer Tesla (-3.96%) have weakened.

At the same time, investors turned to securities deemed affordable, in particular cyclical stocks (sensitive to the economic situation) such as the sports equipment manufacturer Nike (+2.40%), the construction equipment manufacturer Caterpillar (+2, 05%) or the DIY store chain Home Depot (+2.06%).

Another sign of diversification, the Russell 2000 index, which brings together 2000 SMEs, set a new closing record.

Small and medium-sized businesses are traditionally supported by a lower interest rate environment and positive economic conditions.

Elsewhere on the value chart, the department store brand Macy’s fell (-2.21%), after announcing the postponement of the publication of its results, initially expected on Tuesday.

This decision is justified by the discovery of accounting fraud by an employee, who concealed $154 million in delivery costs from the New York group between 2021 and 2024.

The exact impact of these maneuvers is still uncertain, but Macy’s indicated that it had not noticed any effect on its cash flow.

The cosmetics chain Bath & Body Works soared (+16.51%) after publishing better-than-expected quarterly results and revising its forecasts upwards.