NEW YORK (Agefi-Dow Jones)–The New York Stock Exchange ended higher on Monday, led by the financial sector after an upbeat forecast from JPMorgan, as indices attempt to rebound from losses in recent weeks.
The Dow Jones Index (DJIA) gained 2% to 31,880.24 points, and the broader S&P 500 index rose 1.9% to 3,973.75 points. The Nasdaq index, rich in technology stocks, won its side 1.6%, to 11,535.27 points.
After another week of decline – the S&P 500 index briefly entered a “bear market” on Friday, down 20% from its last peak – the market took advantage of the rebound in financial stocks after optimistic statements of banking giant JPMorgan.
“Overall, the short-term credit outlook, particularly for the US consumer, remains robust,” JPMorgan chief financial officer Jeremy Barnum said Monday at an investor day. The bank raised its target for income from loans and confirmed its return on equity forecast, which analysts thought was threatened. The index of financial stocks within the S&P 500 gained 3.7%, while the KBW Nasdaq Bank index climbed 4.7%.
Wall Street was also supported early in the session by signs of de-escalation in Sino-US trade tensions. During a visit to Japan, US President Joe Biden said on Monday he was considering lifting some tariff barriers for China.
However, concerns about recession risks remain elevated in the market.
US indices have fallen in recent weeks as investors wonder how much interest rates the Federal Reserve (Fed) will raise to curb high inflation. Price pressures have eroded earnings for some companies. But fund managers also fear that an excessive tightening of financial conditions will weigh on economic growth.
Inflation concerns have been heightened in recent months as China introduced lockdown measures to contain the spread of Covid-19, further disrupting supply chains. The war in Ukraine has also caused European countries to turn away from Moscow’s oil and gas, driving up prices.
“This year we are facing several issues that in themselves would normally be the main topic of any given year,” said Hugh Gimber, global market strategist at JPMorgan Asset Management. “Yet the markets have to manage them all at once. This lends itself to increased volatility,” he explained.
On the bond market, the yield on the 10-year Treasury bond rose 7 basis points on Monday, to 2.859%.
VALUE TO FOLLOW:
-In an Investor Day, JPMorgan (+6.2%) raised its net interest income (NII) target for 2022 to $56 billion from more than $53 billion previously. The bank also confirmed its return on capital employed target of 17%, which could be achieved this year.
-Starbucks (+0.1%) announced the cessation of its activities in Russia, the invasion of Ukraine ending 15 years of presence in the country.
-US semiconductor maker Broadcom (-3.1%) is in advanced talks to acquire software maker VMware (+24.8%), people familiar with the matter told the Wall Street Journal . The two groups are discussing a cash and stock transaction that could happen soon, if the talks do not break down, the sources said.
-The technology group Apple (+4%) has informed some of its subcontractors that it wants to increase its production outside China, citing in particular Beijing’s “zero Covid” policy, people close to the discussions on Wall Street said Log.
– Retailers Macy (+1.2%), Dollar General (+3.6%) and Costco (+3.1%) advanced ahead of the release of their quarterly results this week. Investors will seek to determine the impact of inflation on consumer behavior.
-Authorities in the US capital, Washington DC, on Monday announced new charges against the CEO of Meta Platforms (+1.4%), Mark Zuckerberg, for his alleged role in the Cambridge Analytica data leak case during the 2016 US election campaign.
-New York Bureau, The Wall Street Journal (French version Thomas Varela, Jérôme Batteau)
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May 23, 2022 16:52 ET (20:52 GMT)