(New York) The New York Stock Exchange reacted lower on Wednesday to the minutes of the last meeting of the American Federal Reserve (Fed) which is very firm and on the alert in the face of inflation.
The Dow Jones index fell 0.52% to 34,765.74 points, the tech-heavy NASDAQ lost 1.15% to 13,474.63 points, the S
The bond market tightened significantly after the publication of the “minutes” of the meeting of the monetary policy committee on July 26. Yields on ten-year bills soared to 4.26%, their highest level since 2008.
In this report from the meeting where a further rate hike was decided, “most participants acknowledged that there were still risks” of persistent inflation that may “require further tightening of monetary policy.” .
The “minutes weighed on Wall Street,” summarized Peter Cardillo of Spartan Capital.
In addition, noted Chris Low, chief economist at FNH Financial, Fed economists continue to believe that US economic growth will slow and unemployment will rise a little in 2024.
“The minutes were tighter than we thought,” added Art Hogan of B. Riley Wealth Management.
“Looks like there is a small cohort that feels we will need to raise rates further this year. That’s enough to invite investors to take profits” on stock markets, he added.
The dollar gained strength against the euro and the yen after the release of the minutes.
Among the other indicators of the day, industrial production in the United States started to rise again in July, after two consecutive months of decline, exceeding market expectations.
Driven mainly by public utility services such as the supply of electricity for air conditioning in this period of extreme heat, it increased by 1% over one month, after a drop of 0.8% in June. Over one year, it remained down 0.3%.
On the property market front, housing starts rose 3.9% in July, close to expectations, but building permit applications, which give an indication of market developments, are almost flat ( 0.1%).
On the value side, the title of the Target department stores rose 2.92% after posting net earnings per share above forecasts on a quarterly turnover nevertheless in decline.
The group, which has suffered from controversy over its articles celebrating the LGBT community, lowered its earnings forecast for the year and signaled that consumers were starting to spend less. On Thursday, investors will watch the results of another behemoth of distribution, the leader of the Walmart discount (0.05% Wednesday).
Mediterranean-inspired fast-food chain Cava, which went public last June, gained 1.06% after rather savory results. Its turnover increased by 18% compared to the number of comparable brands. Cava celebrated a green quarter for the first time with a profit of $6.5 million on sales of $173 million.
Automaker General Motors fell 1.44% after selling its factory in India to Hyundai. Ford also lost 1.46% and Tesla fell 3.16% after again announcing price cuts in China, this time on its Model S and Model X.
The title of newcomer VinFast, a Vietnamese manufacturer of electric vehicles, lost ground (-18.75%) after having soared 68% the day before, the day of its introduction on the NASDAQ, to the point of reaching a higher market capitalization than the American GM.
Home and auto insurance giant Progressive stock soared 8.87% after better-than-expected results, pulling other insurance companies like AllState (4.44%) or Travelers (1.16%).
Strength in the energy sector helped Canada’s main stock index close flat on Wednesday, as U.S. markets fell.
The composite index S
According to Kourkafas, uncertainty remains over central bank action in the coming months, although the US Federal Reserve and Bank of Canada will likely remain on the sidelines in September.
Central banks will continue to depend on the data heading into the fall, Kourkafas said, noting that economic data has already improved since the Fed’s decision last month.
However, central bank officials will want to maintain their go-to-war message, he noted.
In the currency market, the Canadian dollar traded at an average rate of 73.98 US cents, down from 74.17 US cents on Tuesday.
