Wall Street ends in scattered order, a little reassured on the Fed

The New York Stock Exchange ended in disarray on Thursday, thanks to a late-trading rebound following statements by members of the American central bank (Fed), which spoke of a lower rate hike than expected in July.

Wall Street ends in scattered order, a little reassured on the Fed

The New York Stock Exchange ended in disarray on Thursday, thanks to a late-trading rebound following statements by members of the American central bank (Fed), which spoke of a lower rate hike than expected in July.

The Dow Jones lost 0.46%, the Nasdaq index edged down 0.03%, and the broader S

The market reacted to statements by two members of the Federal Reserve, Governor Christopher Waller and St Louis branch chairman James Bullard, who both spoke out on Thursday for a 0.75 percentage point hike in the key rate at the next meeting on July 26 and 27.

"They have insisted publicly in recent months to take precedence over inflation" and raise rates, said Christopher Vecchio of DailyFX. “So the fact that they are both suggesting that 0.75 points is appropriate gives the market reason to reconsider the idea that a one point rise is in the pipeline.”

On Wednesday, investors reacted badly to the release of a much better than expected CPI price index and were betting that the Fed would instead opt for a one-point hike in July, a first in the modern era.

After the public outings of the central bankers, they once again favored the hypothesis of 0.75 points.

For Quincy Krosby, of LPL Financial, Wall Street was also sensitive to other comments from Christopher Waller, who estimated that the economy was not in recession and that it would even continue to grow, at a faster pace. slow.

The analyst nevertheless warned that nothing was decided yet as for the July meeting, certain indicators being able to modify the opinion of the central bankers.

The market will notably follow the results of the University of Michigan's survey on consumer confidence, which asks them in particular about their 5-year inflation forecasts.

“If these forecasts go up significantly, it will become difficult for the Fed,” she said.

Overall, investor sentiment remains low, and most of the data released on Thursday only added to the gloom.

Before the opening, banks JP Morgan Chase (-3.49%) and Morgan Stanley (-0.39%) had each published results below analysts' forecasts, whether for revenue or profit. net.

In question, the brake on the investment bank, while 2021 had been a good year for IPOs and mergers and acquisitions.

JP Morgan Chase also saw its result affected by the increase in provisions for bad debts, a sign of a slight deterioration in the economy, while the bank had, on the contrary, released reserves at the same time last year .

The market is expecting many companies to deliver disappointing results, which should lead to a "value recalibration" of stocks lower, according to Quincy Krosby.

The macroeconomic indicators of the day only weighed down the climate a little more.

New weekly jobless claims rose again to 244,000, a figure above economists' expectations.

As for the producer price index (PPI) for June, it also came out above forecasts, at 1.1% over one month, against 0.8% expected, which indicates, according to Mahir Rasheed, of Oxford Economics, that there is “more inflation in the pipes”.

The late-trading rebound benefited Apple (2.05%) and Microsoft (0.54%), with most very large caps ending in the green.

The Nikkei agency reported Intel's intention (1.34%) to raise prices, which benefited the entire semiconductor sector, be it Qualcomm (4.62%), Broadcom (0.60%) or AMD (1.39%).

The share of the American pharmaceutical group Novavax plunged 26.20%, to 51.62 dollars, after the publication of a notice from the European Medicines Agency citing cases of strong allergic reactions to its vaccine against COVID. -19.

In the wake of JP Morgan Chase and Morgan Stanley, the banks have made the big back, from Goldman Sachs (-2.95%) to Bank of America (-2.30%).

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