(New York) The New York Stock Exchange opened higher on Friday, reassured by a US inflation indicator confirming an easing of prices, which reinforces, in the eyes of operators, the probability of an imminent end to monetary tightening in the States -United.
By 9:45 a.m., the Dow Jones was up 0.48 percent, the NASDAQ was up 1.45 percent and the S
Inflation decelerated further in June, to 3.0% year on year, its most moderate pace in 26 months, according to the report released Friday by the Commerce Department.
The price trajectory “is going in the right direction, good news for members of the Fed (US central bank)”, reacted, in a note, Rubeela Farooqi, analyst at High Frequency Economics.
This news caused bond yields to ease. The yield on 10-year US government bonds was 3.97%, down from 3.99% the day before closing.
The fact that this rate is falling every time it crosses 4%, such as on Thursday, indicates that the market is fast approaching the end of the monetary tightening cycle in the United States, according to Karl Haeling, an analyst at LBBW.
Thursday, the New York market had tensed on the announcement of robust growth in the second quarter, at an annualized rate of 2.4%, more than the 2% of the first three months of the year. Wall Street feared further monetary tightening from the Fed.
The inflection was enough to end the Dow Jones’ streak of 13 positive sessions in a row.
But the PCE index calmed things down on Friday. “All indicators this week point to a soft landing” for the US economy, said Gina Bolvin of Bolvin Wealth Management Group.
Combined with some rather better-than-expected company results overall, “this could be the catalyst to take the market to new heights,” the manager said.
For Adam Sarhan of 50 Park Investments, company publications have been “very strong” so far. “We haven’t had a lot of disappointments,” or a sharp correction in response to a company’s quarterly numbers, he pointed out.
However, according to Jack Ablin, an analyst at Cresset Capital, many companies are “beating expectations on earnings, but falling short on revenue, which shows that their performance is not as good as usual. and testifies to a slowdown in the economy.
On the stock market, the oil companies Exxon Mobil (-2.24%) and Chevron (-1.08%) suffered from a sharp decline in results in the second quarter, after an exceptional 2022 vintage, marked by the Russian invasion of Ukraine and the surge in black gold prices.
Although it exceeded expectations for its net profit, Chevron was not much better off than its rival ExxonMobil, whose result came out below expectations.
The return to profits after two quarters in the red benefited Intel (3.90%), which surprised analysts, who expected another loss in the second quarter. The Santa Clara (California) group benefited from a slight firming up in demand for computers and servers for data storage centers.
Automaker Ford was down (-3.14%) despite better-than-expected second quarter results, supported by its prices, and an increase in annual forecast, some investors worried about losses generated by the vehicle entity electrical.
The biotech Reata was in orbit (52.25%) after the announcement of its takeover by Biogen (-0.40%), for around 7.3 billion dollars. Reata has just obtained the green light from the American health authorities for the marketing of its first drug, a treatment against Friedreich’s ataxia, a degenerative genetic disease.
The hygiene and cleaning products giant Procter
The Cincinnati (Ohio) company is even counting, for its 2024 financial year (started in July), on higher growth (from 3 to 4%) than that of the previous one (2%).