(Photo: 123RF)
MARKET REVIEW. The New York Stock Exchange ended Friday on a mixed note after a lively session, which saw portfolio movements towards traditional Dow Jones stocks on the last day of the month.
The main Canadian stock index gained nearly 200 points.
Stock market indices at closing
In Toronto, the S&P/TSX advanced +197.41 points (+0.89%) to 22,269.12 points.
In New York, the S&P 500 rose by +42.03 points (+0.80%) to 5,277.51 points.
THE Nasdaq lost -2.06 points (-0.01%) to 16,735.02 points.
THE DOW advanced +574.84 points (+1.51%) to 38,686.32 points.
THE loon rose by +US$0.0028 (+0.3787%) to US$0.7339.
THE oil dropped -US$0.73 (-0.94%) to US$77.18.
L’gold fell -US$18.80 (-0.79%) to US$2,347.70.
THE bitcoin fell by -US$926.81 (-1.35%) to US$67,506.76.
Context
The New York market had initially opened in the green, encouraged by the inflation figures published before the opening.
The PCE consumer price index rose 0.3% over one month in April in the United States, unchanged from March, as economists predicted.
Over one year, the price increase reached 2.7%, also in line with projections and at the same level as the previous month.
“This report was a relief, as the core index (excluding energy and food) recorded its weakest increase in four months” (0.2%), commented Chris Low of FHN Financial.
In the process, bond rates eased, with the yield on 10-year US government bonds falling to 4.48%, compared to 4.54% the day before, before returning to 4.50%.
But after this good start, certain indices turned around, with the Nasdaq even approaching, for a time, a 2% loss (-1.74%).
“The appetite for risk is dissipating for lack of a new catalyst,” said Fawad Razaqzada of StoneX.
The lack of clear enthusiasm for the PCE report was also due to the fact that consumption showed further signs of decline, to 0.2% compared to 0.7% in March.
“Purchases of goods are struggling against a backdrop of high interest rates,” noted Michael Pearce of Oxford Economics.
“The market seems a little tired,” noted Angelo Kourkafas of Edward Jones. “Growth stocks are losing momentum,” especially representatives of the technology sector.
Nvidia (NVDA, -0.78% to US$1,096.33), Amazon (AMZN, -1.61% to US$176.44), Broadcom (AVGO, -2.60% to US$1,328.55) thus fell back.
“Traditionally, there is a bit of portfolio rebalancing and selling” as the end of the month approaches, Friday being the last day of May, said Angelo Kourkafas.
Despite this very slight decline, on Friday, the Nasdaq remained on a gain of 6.8% in May, while the Dow Jones gained 2.3% and the S&P 500, 4.8%.
Portfolio changes benefited old economy stocks on Friday, well represented on the Dow Jones.
Despite a new drop in oil prices, the major players in the sector were sought after, likeExxonMobil (XOM, +2.87% to US$117.26) and Chevron (CVX, +2.55% to US$162.30).
Among the Dow Jones residents, banks also stood out JPMorgan Chase (JPM, +1.66% to US$202.63) and Goldman Sachs (GS, +1.40% to US$456.52) as well as the very volatile Boeing (BA, +2.81% to US$177.61).
Angelo Kourkafas did not want to read into Friday’s upheavals anything other than occasional adjustments. “All this could be reversed on Monday,” he warned.
Costco (COST, -0.67% to US$809.89) did not benefit from results better than expectations. Chief Financial Officer Gary Millerchip even said that as inflation eased, customers were returning to buying non-essential products.
The stock was also handicapped by profit-taking, following its 24% increase since the start of the year.
Another optimistic signal for consumption, that of the ready-to-wear group Gap (GPS, +28.60% to US$28.99), which soared after publishing growth in its quarterly sales for each of its four brands (Gap, Banana Republic, Old Navy and Athleta), a performance which he had not recorded for years.
The market sees this as the first signs of strategic changes made by the new CEO, Richard Dickson, former boss of Mattel.
Elsewhere on the coast, Dell was penalized (DELL, -17.87% to US$139.56) by statements from its financial director, Yvonne McGill, who indicated Thursday, after the stock market, that the gross margin of the IT group would decline by approximately 150 basis points (1.5 percentage points) over its entire financial year, due in particular to an increase in its investments linked to artificial intelligence (AI).
The day after the verdict in the trial of Donald Trump, found guilty of the 34 charges against him, the media group of the former American president dropped 5.30%.
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