(New York) The New York Stock Exchange ended Tuesday lower for the second consecutive session, in a downturn after several positive weeks, but without worrying investors, who remain optimistic, overall.
The Dow Jones fell 0.72%, the NASDAQ index fell 0.16% and the broader S
“Markets can’t go up every day, that’s not sustainable,” commented Steve Sosnick of Interactive Brokers. “We just got some profit taking. It’s clean. »
The New York market thus welcomed this decline with phlegm, especially as the indices recovered at the end of the session.
“Keep in mind we’ve only come back down to Thursday levels,” which were more than a year highs, Sosnick said. “That’s not what you call a major correction. »
Illustration of the fact that Wall Street remains calm, the VIX volatility index measuring the nervousness of operators remained Tuesday close to its lowest level in more than three years, reached last Thursday. The New York Stock Exchange was closed on Monday, a public holiday in the United States.
The only indicator of the day confirmed the market view, which sees, as a whole, US economic activity landing softly.
Housing starts reached their highest level in 13 months in May, and building permit applications, considered a leading indicator of the real estate market, jumped 5.2% over one month, while that economists expected a status quo.
For Edward Moya of Oanda, the weakening of housing in recent months was an asset for the US central bank (Fed) in its fight against inflation, “but it seems that we are at a low point” , a sign that the market could rebound and prices with it.
Investors continue to ostensibly doubt the signals from the Fed, the majority of whose members foresee another round of rate hikes by the end of the year. The market only expects a rise in July, followed by a status quo until 2024.
As the equity market slumped, bonds recovered after several difficult sessions. The yield on 10-year US government bonds was 3.71%, down from 3.76% at the close on Friday.
On the rating, the manufacturer of electric vehicles Rivian rose (5.51%) after unveiling an agreement with its competitor Tesla (5.34%) which will allow the owners of its cars to access the network of chargers of the company. led by Elon Musk.
Another Tesla competitor, Nikola, jumped (10.92%) after revealing a social plan on Friday that will reduce its workforce by almost a quarter and should allow the group from Phoenix (Arizona) to spare its cash.
Alibaba fell (-4.53%) after the announcement of a reshuffle of the group’s management, with the appointment of two relatives of the co-founder and emblematic personality of the Chinese giant, Jack Ma, to the positions of president and general director.
Nike was penalized (-3.57%) after a price target lowering from UBS, which expects the equipment manufacturer to publish disappointing forecasts next week.
The cryptocurrency sector has benefited from the launch, by several established financial companies, including Charles Schwab, Fidelity or Citadel, of a crypto-asset exchange platform. It shows that traditional finance players have not given up on engaging in cryptocurrencies despite the recent turbulence in this industry.
Cryptocurrency mining specialists Marathon Digital (17.43%) and Riot Platforms (8.17%) were buoyed by this momentum, as was the exchange Coinbase (2.70%).
The Toronto Stock Exchange retreated 180 points on Tuesday, dragged down by losses in the energy and base metals sectors, while major US indices also tumbled.
Weakness in energy and materials groups led to losses on both sides of the border, but weighed more on the TSX, said Ian Chong, associate portfolio manager for First Avenue Investment Counsel.
Oil was lower on lingering worries about the Chinese economy, Chong continued.
China has lowered key interest rates as the world’s second-largest economy continues to stumble in its post-pandemic recovery.
“There are fears that the health of the economy is fragile, that’s why they have to stimulate the economy and, you know, China is the largest importer of oil in the world, which obviously has negative implications for the economy. price,” Chong said.
The composite index S
Investors are cautiously awaiting Federal Reserve Chairman Jerome Powell’s semi-annual report to Congress this week, Chong said.
“Markets could see more volatility as we can expect some strong reactions to Mr. Powell’s explanation of the decision to take a (interest rate hike) pause this month,” he said. warned Mr. Chong.
“I think he’s going to be more belligerent than pacifist,” he added. I don’t think he wants to fan the stock markets any further. »
While markets have made solid gains year-to-date, this rally has been limited to specific stocks and sectors, Chong observed, and while it has widened somewhat, it is still a a questionable basis for the market to sustain heading into the second half of the year.
“Is this recovery really sustainable, especially as we approach the second quarter earnings season in late July and August? he wondered.
“The second quarter earnings will tell a lot, because not only will we get the numbers for the quarter, but we will also have the outlook for many of these companies as we approach the third quarter. »
In Canada, the latest retailer sales data for April will be released on Wednesday. These should give a better insight into the situation of the consumer in a context of higher interest rates. Sales for the month of March had shown a decline of 1.4%.
In the currency market, the Canadian dollar traded at an average rate of 75.52 cents US, down from 75.72 cents US on Monday.
The price of gold tumbled US$23.50 from Friday to end the session at US$1,947.70 per ounce and that of copper depreciated less than US1 cent from Friday to ending at US$3.88 per pound.