New York (awp/afp) – The New York Stock Exchange opened higher on Friday, reinforced by new signals of a return to normal in inflation in the United States, which opens the way to further declines in rate.
Around 1:45 p.m. GMT, the Dow Jones gained 0.43%, the Nasdaq index was close to balance (+0.01%) and the broader S&P 500 index gained 0.10%.
On Thursday, the S&P 500 hit a new closing record, the 42nd of the year.
The New York market welcomed the PCE report, which highlighted a slowdown in the consumer price index in the United States, falling to 2.2% year-on-year in August compared to 2.5% in previous month.
“This is better than expected (2.3% expected by economists) and it goes in the right direction,” commented Art Hogan, of B. Riley Wealth Management, for whom “this brings the Federal Reserve (Fed) further evidence that it is appropriate to continue lowering rates.”
These cuts “are a driver for stocks and bonds and should provide relief to the most rate-sensitive consumers,” explained Chris Zaccarelli of the Independent Advisor Alliance.
The bond market reacted, with the yield on two-year government bonds falling to 3.63%, compared to 3.60% the day before.
Operators now give a probability of 75% to the hypothesis including cumulative rate cuts of 0.75 percentage points during the last two Fed meetings this year, in November and December.
After a difficult first week, Wall Street went through the month of September like a cannonball, with Dow Jones and S&P 500 setting new records.
For Patrick O’Hare, of Briefing.com, “this resilience brought back (into stocks) part of the money that had been put in reserve, many fearing to miss out” on the rise of the market.
As the month and quarter come to an end, Art Hogan reminds us that October is a traditionally volatile month, which could cause some turbulence in the weeks to come.
“But it’s better to have a little instability when you’re flirting with the heights rather than when you’re trying to get out of a bad situation,” argues the analyst.
On the stock market, the weather was cloudy for the semi-wholesale supermarket chain Costco (-2.71%), with investors sanctioning a turnover lower than expectations, even if net profit exceeded analysts’ projections .
Chief Financial Officer Gary Millerchip said consumers were shifting more toward lower prices in food.
The title of Donald Trump’s media group, Trump Media and Technology Group (TMTG), rose (+5.42%) despite the announcement that a fund controlled by two former candidates of the show “The Apprentice”, built around the real estate developer, sold almost all of its stake, or around 3.8% of the capital.
Boeing accelerated (+1.08%) while management and the mechanics union (IAM) must resume their negotiations on Friday to try to agree on a new social agreement, which would end the strike.
Having become a potential target, Intel remained well oriented (+1.92%) after information indicating the interest of its competitor Qualcomm and a possible investment by asset manager Apollo Global Management.
After the series of announcements from Beijing intended to revive the economy and financial markets, Chinese stocks listed in New York were still progressing significantly. Among them, the technology company NetEase (+2.91%), notably a video game publisher, or the search engine giant Baidu (+4.14%).
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