(New York) The New York Stock Exchange ended slightly lower on Friday, taking a breather after a spirited streak that saw indices hit multi-month highs, led by investors reassured by the trajectory of the economy. American.
The Dow Jones fell 0.32%, the NASDAQ index fell 0.68% and the broader S
“After a solid week, it’s not unusual to see an ebb,” commented Art Hogan of B. Riley Wealth Management. THE
For Karl Haeling, of LBBW, the hindsight was mostly technical, without conviction.
It was probably accentuated, according to the analyst, by the fact that Friday was a so-called “four witches” day, marking the expiration of futures contracts and options on indices and on individual stocks.
The expiry of these financial products often generates volatility and erratic movements in the New York market.
Some profit-taking took place in the technology sector, which has been incandescent since the beginning of the year, in particular on shares in Microsoft (-1.66%), the semiconductor manufacturer AMD (-3.35%) or from Netflix (-2.99%).
At the same time, stocks classified as defensive, i.e. considered less sensitive to the economic situation, benefited from a small rebalancing, like the industrial conglomerate 3m (0.70%), Nike (1.05%) or the drugstore chain Walgreens (2.03%).
Friday’s moderate dip does not challenge the market trend, according to Karl Haeling, who points out that “there is clearly a lot of money coming into the market” in equities.
“It’s a market that remains constructive, but which needed to digest the gains observed” in recent weeks, abounds Art Hogan.
Investors now overwhelmingly believe in a soft landing for the US economy and openly question the communication of the US central bank (Fed), the majority of whose voting members are announcing several rate hikes by the end of the year. year.
On the bond market, rates once again fluctuated markedly, this time upwards. The yield on 2-year US government bonds was 4.72%, down from 4.64% Thursday at the close.
These unusually large movements on this market are partly due to insufficient liquidity, due in particular to the prospect of massive issues by the US government after several months of debt crisis.
On the stock market, the creative software giant Adobe shone (0.87%) after publishing, Thursday after the stock market, results that exceeded expectations and raised its forecasts for its staggered financial year (from December to November).
The San Jose group says it is well positioned in the field of so-called generative artificial intelligence (AI), thanks to its language models and databases.
Another value in sight, the American semiconductor manufacturer Intel (1.54%) was sought after having formalized an investment of 4.6 billion dollars intended for the construction of a new site in Wroclaw, Poland.
Virgin Galactic was put into orbit (16.50%) by the announcement of a first commercial flight on June 27, followed by another in August, the company hoping to adopt a monthly rate thereafter. It offers passengers to spend a few minutes in space, before coming back down to earth.
The designer of connected objects iRobot, known in particular for its Roomba vacuum cleaners, was gaining height (21.20%) after the British competition authority, the CMA, approved its takeover by Amazon (-1.27% ), announced last August, for $1.7 billion.
The Toronto Stock Exchange’s flagship index closed lower on Friday, dragged down by losses in the energy, information technology and base metals sectors, while major U.S. equity indices fell. they too lost their feathers at the end of a week marked by several economic data and a pause in interest rate hikes by the Federal Reserve.
Markets gave back some of their gains but still ended the week in a strong position, observed Monda Mahajan, investment strategist for the firm Edward Jones.
“I think they’re taking a little break before a long weekend here in the States,” she noted.
The composite index S
The big news of the week was the decision of the Federal Reserve to leave its key rate unchanged for the first time since the start of its tightening cycle undertaken last year. While the announcement was widely expected on Wednesday, the central bank signaled it may raise rates twice more this year to continue its fight against inflation.
The immediate reaction was negative from investors, Mahajan said, but by the next day markets were more bullish as they digested the news and comments from US central bank chairman Jerome Powell.
He said on Wednesday that the central bank is seeing progress on inflation and that “it might make sense for rates to rise, but at a more moderate pace.”
The other big story this week was that the rally in equities, which for a while was narrow, is starting to broaden, Mahajan observed.
“We’re starting to see a bit of broadening beyond the three sectors that were leading the way, namely technology, communication services and consumer discretionary. We are getting more participation from areas like industries and materials,” she explained.
“I think that shows a little more confidence in the health of the US economy. »
Investors received a hodgepodge of economic reports in the past week, with inflation cooling in May even as retail sales unexpectedly strengthened. In addition, claims for employment insurance benefits were higher than expected and the manufacturing sector showed a contraction.
Mahajan said the next earnings season is likely to be negative, and she predicted that markets would experience some volatility in the second half of the year as conditions continue to ease. However, she noted that this could turn into an opportunity to get into equities and fixed income.
In the currency market, the Canadian dollar traded at an average rate of 75.77 cents US, up from 75.46 cents US on Thursday.
Crude oil rose US$1.12 to US$71.93 per barrel, while natural gas rose 10 US cents to US$2.63 per million BTU.
The price of gold advanced 50 cents US to US$1971.20 per ounce and that of copper depreciated 1 cent US to US$3.89 per pound.