Wall Street in disarray, fragile hope of an inflection

New York (awp/afp) – The New York Stock Exchange opened higher on Monday, with the ambition of confirming the technical rebound at the end of the session on Friday, at the start of a week rich in publications and indicators.

Around 2:05 p.m. GMT, the Dow Jones gained 0.83%, and the broader S&P 500 index, 0.33%, but the Nasdaq index, with a strong technological composition, yielded 0.33%, .

“It looks like we’re headed for a rebound,” commented Peter Cardillo of Spartan Capital Securities.

The first explanation for this inflection comes, according to him, from the reaction of the market after the S&P 500 index fell below the symbolic threshold of 20% drop from its peak on Friday.

Thus briefly in “bear market”, which means that it is beyond the simple correction, the most representative index of the New York market regained height at the end of the session.

“The bear has returned to hibernate,” summarized Patrick O’Hare in a note, for whom the end of the month could favor momentum fueled by portfolio adjustments.

For Peter Cardillo, the measured optimism blowing in the market was also due to the announcement by US President Joe Biden of the launch of a new economic partnership in Asia-Pacific.

Last card shot by the supporters of a positive session, according to Patrick O’Hare, a certain bubbling on the market for mergers and acquisitions.

The title of the specialist in remote computing (cloud) VMware soared (+ 17.08% to 112.16 dollars) thus, helped by press reports reporting advanced discussions for a takeover by the semiconductor manufacturer Broadcom, which was heckled (-4.73% to 517.52 dollars).

As for Electronic Arts, it advanced (2.47% to 133.99 dollars), supported by information from the Puck site that the video game publisher recently had discussions with several potential buyers, including Disney and Apple.

The week should inform, like the previous one, on the health of the retail trade, while many investors fear an economic slowdown, or even a recession in 2023.

After Walmart and Target, which had alerted Wall Street with their margins and their prospects deemed disappointing, Best Buy and Nordstrom are expected on Tuesday, as well as Gap and Macy’s on Thursday.

Even before its publication, Gap was sanctioned (-7.32% to 10.13 dollars), after the lowering of the recommendation of Citi analysts, for whom the ready-to-wear brand will suffer from inflation, just like the department store chain Kohl’s (-1.43% to 38.64 dollars).

“The market is still fragile”, warned Peter Cardillo, about these publications to come, “but I think what we saw on Friday indicates that we have probably passed the worst of the decline” of Wall Street, started at the beginning of the year.

On the macroeconomic level, a series of indicators should also help operators to see more clearly the trajectory of the economy.

The PMI indices for manufacturing industry and services in May, on Tuesday, will be followed by durable goods orders, on Wednesday, the PCE inflation index, closely followed by the American central bank (Fed), on Thursday, and the Consumer Confidence Index (University of Michigan), Friday.

JPMorgan was sought (3.48% to $121.52) after the bank said in a presentation released on Monday that it expected to achieve a key return on capital target in 2022, after warning earlier this year , that she would probably miss it.

The group took with it the entire banking sector, from Citigroup (+3.44%) to Wells Fargo (+3.10%), via Bank of America (+4.09%).

The food group JM Smucker plunged (-17.18% to 108.29 dollars), after the massive recall of many references of its peanut butter Jif, following possible contamination with salmonella.

After experiencing violent upheavals for several weeks, the bond market was stabilizing. The yield on 10-year US government bonds rose slightly to 2.80% from 2.78% on Friday.


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