The floor of the New York Stock Exchange (AFP/ANGELA WEISS)
The New York Stock Exchange calmed down on Friday, trading slightly in the red after the opening following the euphoria the day before aroused by an ebb in inflation in the United States while China eased several anti- Covid.
The Dow Jones yielded 0.34%, the Nasdaq 0.20% and the S&P 500 0.12% after the best session in two and a half years for the New York indices.
On Thursday, Wall Street exuberantly celebrated a decline in inflation that raised hopes that US price inflation has finally peaked.
The technology-dominated Nasdaq jumped 7.35% to 11,114.15 points and the broader S&P 500 index jumped 5.53% to 3,956.37 points, increases over a day not seen in two and a half years. The Dow Jones gained 3.70% to 33,715.37 points.
“What a recovery it was yesterday, to say the least!” exclaimed Patrick O’Hare of Briefing.com. “The huge gains were a manifestation of the long suppressed hope that inflation has peaked and that the Fed’s aggressive approach has also peaked,” the analyst added.
The S&P 500 indeed posted its 15th best trading session since 1953. Along with the Nasdaq, the two indices posted their strongest daily increases since the start of the pandemic in the spring of 2020.
US inflation slowed in October, more than expected, to 7.7% year on year, according to the CPI index, against 8.2% in September, falling to its lowest level since January 2022, announced Thursday the US government.
This slowdown was seen as a sign that the measures taken by the American central bank, the Fed, to bring inflation back in line by drastically raising the cost of money, are finally starting to bear fruit, and that the Fed could slow its rate hikes early next year.
Fed funds futures markets are now 85% pricing in a rate hike of just 50 basis points at the next monetary meeting on December 14-15. This probability was only 50% before the publication of the CPI index.
By then, Fed officials will have known about the price hike for November.
Another catalyst that should prove positive for the markets, Beijing announced a relaxation of several anti-Covid measures for travelers, including a reduction in quarantine on arrival. Oil prices jumped betting on greater demand for energy.
But the upturn in tech stocks on the Nasdaq subsided markedly on Friday with the news that struggling cryptocurrency platform FTX had filed for bankruptcy and founder Sam Bankman-Fried resigned.
“FTX Trading (…) and approximately 130 companies affiliated with FTX Group have started the voluntary procedure of + chapter + 11 + (of the bankruptcy law)”, announced FTX in a press release posted on its Twitter account.
Securities of the Coinbase trading platform fell 5.73%.
The big names in tech were coming back from their soaring the day before: Apple dropped 1.56% around 2:30 p.m. GMT after jumping almost 9% on Thursday. Tesla yielded 3.51% and Meta, parent company of Facebook, dropped 1.39%.
Bond yields remained down to 3.81% against 3.82% the day before when they had declined sharply.
© 2022 AFP
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