(Boursier.com) — Wall Street peaked slightly at the start of the session despite persistent tensions on the bond market. The S&P 500 advanced 0.25% to 5,217 pts, while the Dow Jones gained 0.17% to 38,969 pts. The Nasdaq rose 0.43% to 16,318 pts. While the Fed maintained its forecast to cut interest rates three times this year at its last meeting, discussions are growing over whether the Federal Reserve will do so after the robust data. jobs revealed on Friday.
On Thursday, Minneapolis Fed President Neel Kashkari had already suggested that the Fed might not cut interest rates at all this year: “if we continue to see inflation move erratically, that would make me will lead me to ask whether it is really necessary to make these rate reductions. Apollo Global Management chief economist Torsten Sløk said Friday that the jobs report was in line with his previous call for no cuts this year. “We remain confident that the Fed will not cut interest rates this year,” Sløk wrote in a note to clients picked up by ‘Yahoo! Finance’.
Other observers, however, say that labor market data showed positive developments on the supply side, helping to reinforce the hypothesis that a strong labor market and wage growth will not necessarily fuel the ‘inflation. “We view the report as supporting Chairman Powell’s view that the Fed can begin a cautious, gradual easing cycle later this year – provided available inflation data shows improvement,” the statement said. Michael Gapen, economist at Bank of America. “We still think a rate cut in June is likely, although the very good jobs report last Friday makes the subject more moot now,” said Wei Li, chief global investment strategist at BlackRock, on ‘Bloomberg Television’. “We are talking about a labor market that is not only tight, but also very strong.”
These divisions are well reflected by the CME Group’s FedWatch tool since according to the latter there is now approximately as much chance of seeing the Fed carry out a first rate cut as of observing a new status quo during the meeting of the 11 -June 12. On the bond market, the 10-year bond is still rising by 1.6 basis points to 4.418%, after having flirted with 4.5% a little earlier in the day.
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In the meantime, while new inflation figures will be monitored on Wednesday, just like the ECB meeting on Thursday, the micro will start to regain the upper hand with the start of the first quarter results season. JP Morgan, Wells Fargo, BlackRock, Citi and Delta Air Lines will be on deck this weekend.
On the oil market, the barrel of WTI crude fell (-1.2% to 86 dollars) on the Nymex but remained high against a backdrop of persistent tensions in the Middle East. The ounce of gold is moving around equilibrium after hitting a new high at more than $2,350. The dollar index is stable against a basket of currencies and Bitcoin gains more than 3% to $71,500.
Values
*Taiwan Semiconductor Manufacturing (TSMC) obtains enormous financial support from the United States. The US Department of Commerce announced that it would grant the local division of the Taiwanese group a $6.6 billion subsidy for the production of advanced semiconductors in Phoenix, Arizona, as well as a low-cost loan. cost of up to $5 billion. TSMC has agreed to increase its investment in the United States, initially planned at $25 billion, to $65 billion, and to set up a third factory in Arizona by 2030, the Commerce Department said. The Taiwanese company will produce the world’s most advanced 2-nanometer chip at its second factory in Arizona, with production expected to begin in 2028.
The award of this aid to TSMC marks a new step in President Biden’s efforts to boost the US semiconductor industry through the 2022 Chips and Science Act. science). It’s one of the largest announced under the program, which provides $39 billion in direct grants – plus $75 billion in loans and guarantees – to persuade semiconductor companies to build factories. in the United States after decades of outsourcing production overseas. The Asian giant plans to begin high-volume production at its first U.S. factory by the first half of 2025. TSMC Arizona is also committed to supporting the development of advanced packaging lines through partnerships in the United States , in order to allow customers to purchase chips entirely manufactured on American soil.
* You’re here (+4.5%) will unveil a ‘Robo-taxi’ on August 8, announced its CEO, Elon Musk, in a message published on ‘X’ Friday evening. Long-awaited, this vehicle of the future, presented for the first time to investors in 2019, has long been a key element in the car manufacturer’s high valuation. The company has repeatedly said its next-generation vehicle platform will support both a cheaper car and a dedicated robo-taxi. Although Tesla has ‘teased’ both, it has yet to reveal prototypes. The billionaire’s splashy product announcements have long played a key role in Tesla’s ability to excite customers and investors without spending on traditional advertising. ‘Reuters’ reported on Friday that the carmaker had canceled plans for a cheaper electric vehicle and was devoting more resources to trying to bring a ‘robot taxi’ to market. E.Musk responded by saying “Reuters is lying”, without giving details.
* Spirit Airlines (+3.2%) is launching a vast cost reduction program, less than three months after the failure of its proposed merger with JetBlue Airways. The American low-cost carrier also postponed the delivery of all its Airbus aircraft scheduled for 2025 and 2026 to between 2030 and 2031, improving its liquidity by around $340 million over the next two years. The carrier will also furlough 260 pilots from September 1, she said. “The postponement of these aircraft gives us the opportunity to reset the business and focus on the airline’s core business while we adapt to changes in the competitive environment,” said CEO Ted Christie. .
Spirit is working to shore up its finances after its merger with JetBlue fell through after a federal court blocked the deal on competition grounds. The carrier has burned cash over the past two years as uneven demand, engine problems and higher costs weigh on the U.S. domestic market. The airline had announced an order for 100 Airbus A320neos in October 2019, with an option for 50 more units, most of which have not yet been delivered.
* Amazon.com (+0.6%) could close at a new all-time high this evening. The internet giant’s previous high was in July 2021, at $186.57, according to data compiled by Bloomberg. Unlike the other ‘magnificent’ ones that have set records in recent times, the firm founded by Jeff Bezos has had more difficulty keeping up, losing almost 60% compared to its levels reached during the Covid-19 pandemic. With significant cost savings and development in AI, the company has significantly improved its position in recent months.
* Boeing nibbles 0.1%. Southwest Airlines announced that one of its Boeing 737-800s lost an engine cowling during takeoff Sunday in Denver, triggering an investigation by the Federal Aviation Administration, the regulator. American aviation. Furthermore, Bernstein speaks of a “purgatory situation” as long as Boeing has not resolved some of its problems, which led the intermediary to reduce its price target on the aircraft manufacturer from 240 to 32 dollars.
* Paramount Global (-6%) could buy independent studio Skydance Media in a stock transaction valued at around five billion dollars, the ‘Wall Street Journal’ reported.
* Apple (-0.4%) announced Friday evening a system allowing music streaming applications like Spotify, present in its App Store, to inform their users of the existence of other means of payment when they operate in the European Economic Area, in order to comply with EU rules. Separately, Apple has asked a US appeals court to overturn a court’s decision to ban imports of some of its smartwatch models as part of a patent dispute with Masimo.
* Bristol Myers Squibb (-0.1%) announced that results from late-stage studies of its experimental schizophrenia drug showed it helped reduce symptoms of the illness without the common side effect of weight gain linked to other antipsychotics.
* Johnson & Johnson (-0.1%). The Food and Drug Administration, the health authority in the United States, has authorized the laboratory’s cell therapy, along with that of Bristol Myers Squibb, as an early treatment for patients suffering from multiple myeloma, a form of blood cancer.