MARKET REVIEW. The Toronto Stock Exchange partially recovered from its morning weakness but nonetheless closed at its lowest level in 16 months, weighed down by losses in its three largest sectors.
The New York Stock Exchange closed in a mixed order, thanks to a rebound at the end of the session after statements by members of the US central bank (Fed), who spoke of a lower-than-expected rate hike in July.
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Stock indices at closing
In Toronto, the S&P/TSX closed down 286.13 points (-1.54%) to 18,329.06 points.
In New York, the S&P500 it fell 11.40 points (-0.30%) to 3,790.38 points.
the nasdaq it rose 3.60 points (+0.03%) to 11,251.19 points.
the DOW it fell 142.62 points (-0.46%) to 30,630.17 points.
the loon lost $0.0081 (-1.0521%) to $0.7624.
the oil advanced US$0.17 (+0.18%) to US$96.47.
L’Prayed closed down US$27.50 (-1.58%) at US$1,708.00.
the bitcoin grossed US$902.85 (+4.57%) to US$20,647.34.
The market reacted to the statements of two members of the Federal Reserve, Governor Christopher Waller and the president of the St. Louis branch, James Bullard, who spoke on Thursday for a rate increase of 0.75 percentage points in the next meeting on July 26 and 27.
“They have publicly insisted in recent months on taking precedence over inflation” and raising rates, said DailyFX’s Christopher Vecchio. “So the fact that they both suggest that 0.75 point is appropriate gives the market a reason to reconsider the idea that a one point increase is in the works.”
On Wednesday, investors reacted badly to the release of a much better-than-expected CPI price index and bet the Fed would opt for a one-point hike in July, the first in the modern era.
After the public exits of the central bankers, they returned to favor the hypothesis of 0.75 points.
For Quincy Krosby, of LPL Financial, Wall Street was also sensitive to other comments by Christopher Waller, who estimated that the economy was not in recession and that it would even continue to grow, at a slower pace.
However, the analyst warned that nothing has yet been decided regarding the July meeting, and certain indicators may change the opinion of the central bankers.
The market will follow in particular the results of the University of Michigan consumer confidence survey, which asks them in particular about their 5-year inflation forecasts.
“If these forecasts go up significantly, it will be difficult for the Fed,” he said.
Overall, investor sentiment remains subdued, with most of the data released on Thursday only adding to the gloom.
Before the opening, the banks JPMorgan Chase (JPM, $108.00, -3.49%, -3.91 points)) Y Morgan Stanley (MS, US$74.69, -0.39%, -0.29 points) each posted results below analysts’ forecasts, either in revenue or net profit.
In question, the brake on investment banking, while 2021 had been a good year for IPOs and mergers and acquisitions.
JPMorgan Chase its result was also affected by the increase in loan loss provisions, a sign of a slight deterioration in the economy, while the bank, on the contrary, had released reserves at the same time last year.
The market expects many companies to deliver disappointing results, which should lead to a “recalibration in value” of stocks to the downside, according to Quincy Krosby.
The macroeconomic indicators of the day only weighed down the climate a little more.
Weekly new jobless claims rose again to 244,000, above economists’ expectations.
As for the producer price index (PPI) for June, it also came out above forecasts, at 1.1% in one month, compared to the 0.8% forecast, which indicates, according to Mahir Rasheed of Oxford Economics , that there is “more inflation in pipes”.
The rebound at the end of the session benefited Apple (AAPL, $148.47, +2.05%, +2.98 points) Y Microsoft (MSFT, $254.08, +0.54%, +1.36 points)with most very large caps ending in green.
The agency Nikkei (NI225, +0.62%, +164.62 points) declared the intention toIntel (INTC, US$37.71, +1.34%, +0.50 points) to raise their prices, which has benefited the entire semiconductor industry, be it Qualcomm (QCOM, $141.90, +4.62%, +6.26 points), Broadcom (AVGO, $484.64, +0.60%, +2.91 points) Where amd (AMD, US$78.60, +1.39%, +1.08 points).
The action of the American pharmaceutical group Novavax (NVAX, -18.33 points) It plummeted 26.20%, to $51.62, after the publication of an opinion by the European Medicines Agency reporting cases of severe allergic reactions to its Covid-19 vaccine.
After JPMorgan Chase and Morgan Stanley, the banks have gained a lot, from Goldman Sachs (GS, $281.59, -3.05%, -8.87 points) at Bank of America (BAC, US$30.13, -2.30%, -0.71 points).
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