Wall Street ends up, the market reassured by a debt issue

Operators of the New York Stock Exchange (GETTY IMAGES NORTH AMERICA/AFP/SPENCER PLATT)

The New York Stock Exchange ended higher on Monday, on a market still well oriented and reassured by a rather successful American debt issue, at the start of a week which promises to be calm.

The Dow Jones rose 0.58%, the Nasdaq index gained 1.13% and the broader S&P 500 index gained 0.74%.

“The only thing investors paid attention to today was this debt issue, and the results were good,” said Jack Ablin of Cresset Capital.

The US Treasury has, in fact, auctioned 16 billion dollars of 20-year bonds, at a median rate of 4.73%, slightly lower than the current yield of bonds of the same maturity on the market, i.e. 4.77 %.

Peter Boockvar, of Bleakley Financial Group, nevertheless noted that the ratio between demand and supply, closely followed for this type of operation, had been lower than the average for the past year, a sign of a measured appetite.

The issue was therefore “mixed”, according to him, but “sufficient to drive the bond market”, he concluded.

The yield on 10-year US government bonds fell slightly, to 4.41%, compared to 4.43% at Friday’s close. As rates move in the opposite direction to the price, this is a sign of a strengthening of the bond market.

“The Treasury is putting enormous volumes of debt on the market,” recalled Jack Ablin, the result of a widening US government deficit. “And investors were concerned that this would raise rates to attract demand,” which has not been the case until now.

This event allowed Wall Street to maintain its momentum and the S&P 500 to record its 14th positive session in 16 trading days.

“The soft landing of the (American) economy is now the central scenario” of the New York market, which benefits stocks.

Wall Street was also stimulated by Microsoft (+2.05%), driven by the announcement of the hiring of the co-founder and former general director of OpenAI, Sam Altman, removed from the start-up on Friday by the board of administration.

The Redmond (Washington State) group, whose action reached a record on Monday, seems likely to take advantage of this crisis to further establish its position as a driving force in so-called generative artificial intelligence (AI).

Microsoft ($2.805 billion) is now within reach of the world’s largest capitalization, Apple ($2.977 billion).

Other AI stars shone, like the data analysis specialist Palantir (+4.15%) or the graphics card manufacturer Nvidia (+2.25%), whose quarterly results are expected Tuesday after trading.

In a market made volatile by the absence of a number of operators, already focused on the Thanksgiving holiday on Thursday, several stocks customary with sudden variations were at the party, such as Coinbase (+7.12%), Arm ( +6.71%) or Alibaba (+1.11%).

Boeing (+4.65%) benefited from an increase in recommendation from Deutsche Bank analysts, now buying the stock and who are confident in the aircraft manufacturer’s ability to increase its delivery rates.

The Argentine oil giant YPF soared (+40.07%) after the victory of the ultraliberal Javier Milei in the presidential election in Argentina. The economist mentioned the privatization of the energy group, nationalized in 2012.

The Bristol Myers Squibb laboratory fell (-3.82%) after the announcement of the postponement of a decision by the American Medicines Agency (FDA) concerning the expansion of cases of use of its cancer treatment Abecma , developed in collaboration with the biotech 2seventy bio (-18.31%).

© 2023 AFP

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