The floor of the New York Stock Exchange (GETTY IMAGES NORTH AMERICA/AFP/Jamie McCarthy)
The New York Stock Exchange ended up scattered around the balance on Wednesday: after starting in the green, the indices ended the penultimate session of a month without trend with a strong increase for stocks.
The Dow Jones gained 0.04% to 35,430.42 points while the technology-dominated Nasdaq lost 0.16% to 14,258.49 points and the S&P 500 lost 0.09% to 4,550.58 points.
“We haven’t really moved in these last few sessions,” said Steve Sosnick of Interactive Brokers, referring to the lack of persuasiveness of the indices since the start of the week.
“The market is digesting the movements of November,” added the analyst as the indices prepare to sign their best month of the year on Thursday.
The Dow Jones is up almost 8% in the month of November, the Nasdaq climbed more than 11% and the S&P 500 almost 9%.
“Given where we come from, it would take a much stronger catalyst to push stocks higher,” said Art Hogan of B. Riley Wealth Management to AFP.
The bond market has further relaxed with ten-year rates falling to 4.25%, unprecedented for almost three months. Bond rates are reacting to the idea that a first rate reduction from the Fed could come as early as May.
This scenario was fueled in particular by the comments of Fed Governor Christopher Waller the day before, showing himself to be more conciliatory and optimistic about the trajectory of inflation reaching the 2% target.
On the macroeconomic front, the American government revised upwards the economic growth of the United States in the third quarter to 5.2% at an annualized rate, against 4.9% previously estimated.
“These figures show that the American economy was booming in the third quarter despite higher interest rates (…). But activity in the fourth quarter should not be as robust,” said Patrick O ‘Hare Briefing.
Indeed, the Beige Book published mid-session showed that activity “slowed down” at the end of October and beginning of November. The Fed report shows that eight of the twelve regions are stagnating or declining and that price increases are moderating.
On Thursday, the Fed’s preferred inflation measure, the PCE index, will be released for the month of October.
“I expect few surprises,” while an increase over the month of 0.2% is expected for the PCE index excluding food and energy, said Steve Sosnick. “On the other hand, if there is a surprise, it will change the scenario and move the markets,” he promised.
On the stock market, General Motors shone (+9.38% to $31.60) after showing that it was going to pamper its shareholders while its stock has had a mediocre performance since the start of the year.
Despite the liabilities incurred with the impact of the six-week strike ($1.1 billion), the automaker committed to a $10 billion share buyback plan.
The group, which also announced slightly lower than expected profit projections of between $9.1 and $9.7 billion for 2023, will increase its dividend by 33%.
Speculation reared its head with a jump of more than 20% ($16.25) in the highly volatile GameStop action, a week before the video game distributor announced its results.
Shoe distributor Foot Locker saw its stock rise 16%, as the brand exceeded expectations for its third quarter results and annual forecasts.
Banking stocks seemed to benefit from the decline in bond rates such as Bank of America (+2.94%) or Citigroup (1.98%).
© 2023 AFP
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