(CercleFinance.com) – (CercleFinance.com) -The ‘Powell’ effect is transformed into a ‘wow’ effect with even more impressive scores than the day before (strongest increase in 7 months), and closings at their highest of the day on the main indices (and at the highest since October 18 for the S&P’ and the Nasdaq, the latter aligning a 5th session of increase).
Wall Street continues a 4th session of increase with the Dow Jones at +1.70%, the S&P-500 which soars by +1.9%, to 4,318 points.
The day after the ‘dovish’ message delivered by Jerome Powell, the S&P500 rode the strong comeback of financials and regional banks that have been battered since last March: Keycorp +8.3%, Citizens Financial +7.5%, Zions +7 .1%, Regions Financial +6.1%, Bank of America +4.6%, Citigroup +4.5%, AIG +3.7%, AMEX +3%…
There was technically a bit of overselling: the fear & greed index was in the red zone of extreme pessimism.
But the bullish reaction from Wall Street, as soon as it returned -marginally- to correction territory (-10% on the peaks lasting only 24 hours for the S&P500) seems a little disheveled with +3.5% for the Nasdaq in 48 hours.
The Nasdaq (+1.8%) was boosted by the return to favor of the auto sector (the drop in the cost of credit is obviously good news) with Lucid at +12.1% and Tesla at +6.3%. Also note the rise of Starbucks +9.5%, Paypal +6.6%, Qualcomm +5.8%, ASML +3.8%, Nvidia +2.8%, Apple +2.1%.
Apple, which published figures generally very in line with expectations, lost -3% in electronic transactions.
Sales of i-Phones correspond exactly to the $43.81 billion expected, overall turnover amounts to $89.5 billion compared to $89.25 billion expected, sales of i-Mac fall by 8.6 to $7.6 billion.
Profits are very slightly higher than forecast.
With Apple, the rate of companies beating the consensus (even marginally) stands at 80.5%, which is historically an unusual outperformance.
Microstrategy gained +6.5%, still boosted by the rise of Bitcoin beyond $34,500 (the firm would have its BTC at $28,000 on average, which today represents the cost of ‘mining’, all sources of combined energy).
Headwinds continue to blow on Moderna -6.6%, Airbnb -3.5%, Cognizant -2%.
The FED will perhaps wait several quarters before opting for a ‘pivot’ (September 2024?) but US short and long rates experienced their sharpest decline on Wednesday evening since March 13 (regional bank crisis and great fear of a Lehman bis): the ’10 years’ erased up to -30Pts in 24 hours before reducing this gap to -25Pts, at 4.68% against 4.625% at its lowest on November 2).
The ’30 years’ still erases -8Pts to 4.836% while it had started the month of November at 5.092% on Wednesday morning.
The ‘2 year old’, also very popular, had erased -15 points the previous evening, it increased by +6 points towards 4.992%.
This Thursday was particularly busy with ‘macro’ figures, which took a back seat after the performance deemed ‘dovish’ by Jerome Powell at the press conference.
The first publication at the beginning of the afternoon in the United States concerned non-agricultural productivity: it increased by 4.7% in the United States in the third quarter of 2023 at an annualized rate, according to the preliminary estimate from the Department of Labor, after an increase of 3.6% in the previous quarter.
Taking into account a 3.9% increase in hourly wages, non-agricultural unit labor costs in the United States fell by 0.8% in the third quarter of 2023.
The most anticipated figure published 45 minutes later concerned new orders to American industry: they increased more vigorously than expected in September, by +2.8% in September, mainly supported by a surge in orders in aeronautics which explode by more than 92%.
Orders for non-aeronautics capital goods, often considered a reliable barometer of companies’ investment plans, increased by 0.8%.
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