MARKET REVIEW. The New York Stock Exchange closed sharply higher on Thursday, optimistic about the ability of the US central bank (Fed) to maneuver a soft landing despite the contraction of the US economy in the second trimester.
The Toronto Stock Exchange, for its part, advanced more than 200 points.
To (re)consult market news
Stock indices at closing
In Toronto, the S&P/TSX it rose 202.15 points (+1.05%) to 19,456.71 points.
In New York, the S&P500 it rose 48.82 points (+1.21%) to 4,072.43 points.
the nasdaq it rose 130.17 points (+1.08%) to 12,162.59 points.
the DOW it gained 332.04 points (+1.03%) to 32,529.63 points.
the loon it rose $0.0009 (+0.1171%) to $0.7806.
the oil advanced US$0.04 (+0.04%) to US$97.30.
L’Prayed it finished US$35.50 (+2.04%) at US$1,773.00.
the bitcoin earned $1,231.81 (+5.42%) at $23,955.56.
“We are witnessing a very clear transition between a market that always reacted negatively to any information and a market that turned positive,” said Adam Sarhan of 50 Park Investment.
The companies “are publishing results that are not very good, but the expectations are so bad that the market reaction is moderate in terms of negativity,” the analyst told AFP.
“Add to that the fact that the Fed did not raise rates by one percentage point, but only by 75 points, it is still a positive trait for the market,” he added, noting that Wall Street was still concerned that the central bank bank would be more aggressive.
However, the gross domestic product (GDP) of the United States contracted by 0.9% year-on-year in the second quarter, a figure worse than expected (+0.3%) that adds to the decrease of 1.6% already registered from January to March.
But the equity market reacted optimistically: “There is a tendency to think that the recession will be moderate,” said Jack Albin of Cresset Management.
“It looks like the Fed could have an easy way out in its fight against inflation, without inflicting too much damage on the economy,” Albin said.
“But I am still waiting for the next inflation numbers before declaring victory,” the analyst added.
Hope for a mild recession
Adam Sarhan shared this point of view: “yes, we are in a recession, but it could be very mild. And a mild recession is the best possible scenario.”
“It looks like we’re headed for a soft landing,” he said.
The Biden administration for its part set out to show on Thursday that the US economy remained “resilient,” downplaying the definition of a recession.
Treasury Secretary Janet Yellen instead described “an economy in transition to more stable and sustainable growth.”
In the bond market, yields on 10-year Treasury bills fell modestly to 2.66%, but their lowest level in four months.
On the coast, Amazon (AMZN, US$122.28) which concluded as the Nasdaq at +1.08% took off like a rocket (+11.83%) in after-hours trading on its results announcement.
The No. 1 online retailer posted a 7% rise in revenue to $121bn in the second quarter, despite the group posting a $2bn loss related to a painful investment in the electric carmaker. Rivian (RIVN, $33.84, +5.73%).
Apple (AAPL, $157.35, +0.36%) also shined in after-hours e-commerce (+2.45%), following earnings, albeit down almost 11%, but with iPhone sales beating expectations.
It’s rare to fall between big tech caps, Goal (Facebook, GOAL, $160.72) suffered the blow (-5.22%) after the announcement of a drop in billing for the first time in its history, linked to competition from TikTok and the reduction in spending by advertisers.
Mark Zuckerberg’s group has also suffered a snub from the US competition authority (FTC) that prevents it, for reasons of market dominance, from buying a virtual reality specialist, Within Unlimited.
the airline Spirit (SAVE, US$25.66, +5.60%)eventually acquired by jet blue (JBLU, $8.37, -0.36%) for $3.8 billion, skyrocketed while border (ULCC, $13.58, +20.50%)who threw in the towel, was highly sought after.
The semiconductor giant Intel (INTC, US$39.71) which ended down 1.17%, plunged 10.10% after the close following quarterly results as a disappointing outlook.
The other big players in the sector such as Nvidia (NVDA, $179.84, +1.09%) Where amd (AMD, $91.67, +2.06%) on the other hand, they were doing well, especially after the approval in the US Congress of a law to support the sector.
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