A Christmas tree in front of the New York Stock Exchange (AFP/ANGELA WEISS)
The New York Stock Exchange ended higher on Friday, boosted by the decline in bond yields, themselves influenced by expectations of a rate cut by the Fed (American central bank) from the first quarter of 2024.
The Dow Jones rose 0.82%, the Nasdaq index gained 0.55% and the broader S&P 500 index advanced 0.59%.
Having started in the red, Wall Street’s flagship indices recovered throughout the session, allowing the S&P 500 to record a fifth positive week in a row.
“It’s a combination of factors,” CFRA’s Sam Stovall said of the turnaround, “but it’s mostly due to the continued easing of bond yields.”
The yield on 2-year US government bonds, considered the most representative of market expectations in terms of monetary policy, fell to 4.53%, compared to 4.68% on Thursday at the close, the lowest since five and a half months.
Operators are now counting on a first cut in the Fed’s key rate as early as March, a scenario largely ruled out just a week ago.
This posture is linked to the increasingly clear signs of an economic slowdown in the United States and a continued deceleration of inflation.
The picture was confirmed on Friday by the ISM index, which highlighted a contraction in activity in the manufacturing sector in November. The index stood at 46.7% (a figure below 50 indicates a decline in activity), unchanged from the previous month, while economists expected a rebound, to 47.8%.
The New York market ignored the statements of Fed President Jerome Powell, who nevertheless considered, on Friday, “premature” to “speculate on the moment when monetary policy could be relaxed”, during an intervention at Atlanta (Georgia).
Sam Stovall points out that historically, stocks tend to perform well during periods ranging from the end of a tightening cycle to a first rate cut.
“There are many elements likely to fuel investor confidence,” according to him.
Generally speaking, this wind of optimism benefited a number of volatile stocks, notably Airbnb (+6.87%), Lyft (+12.02%) and Peloton (+9.89%).
In the same momentum, representatives of the bitcoin”>cryptocurrencies sector were carried along, such as the “miners” Marathon Digital Holdings (+14.45%) and Riot Platforms (+9.72%).
Elsewhere, Tesla reversed course (-0.52%) the day after the presentation, with fanfare, of a new electric pick-up, the Cybertruck, with futuristic lines. A Morningstar analyst estimated that the selling price of the base model, or $60,990, positioned the vehicle in the high-end market and not in that of the general public.
In contrast, Ford, whose competitor, the F-150 Lightning, is sold for $50,000, had a successful session (+3.12%), as did the electric vehicle manufacturer Rivian (+7.58%). .
Paramount Global was sought after (+9.81%) after the Wall Street Journal reported that the media group was considering an offer bringing together its streaming service Paramount+ and that of Apple (+0.68%), Apple TV+, at a lower price than the two separate subscriptions.
Pfizer was sanctioned (-5.12%) after stopping clinical trials of its two-daily anti-obesity pill danuglipron. The results showed a high proportion of unwanted side effects during the last wave of tests. The laboratory nevertheless decided to continue testing the version at a daily dose.
Computer equipment manufacturer Dell Technologies slipped (-5.19%) after reporting, Thursday after the market, a quarterly turnover lower than analysts’ projections. The Round Rock (Texas) group recorded a slowdown in all its branches, including servers and data storage.
© 2023 AFP
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