A New York Stock Exchange trader on July 11, 2022 (GETTY IMAGES NORTH AMERICA/AFP/Michael M. Santiago)
The New York Stock Exchange moved in disorganized fashion on Tuesday, in a waiting position before the publication of an inflation indicator on Wednesday and a first wave of results at the end of the week.
Around 2:15 p.m. GMT, the Dow Jones gained 0.17%, the Nasdaq index, with a strong technological identity, yielded 0.55%, and the broader S&P 500 index took 0.23%.
Patrick O’Hare, from Briefing.com, saw in this beginning of the session the continuation of the downward movement started on Monday, the Asian and European places being, too, oriented in the red.
The wait-and-see climate, already dominating on Monday, continued to reign on Wall Street.
Investors migrated to US debt, an asset deemed safe which also offers significantly higher rates than most major global markets.
The yield on 10-year US government bonds, which moves in the opposite direction of their price, eased to 2.89%, against 2.99% the day before. The 2-year rate remained well above the 10-year rate, a sign often interpreted as the harbinger of a recession, with the spread between the two yields reaching its highest level in 15 years.
“Investors are watching the results and the big concern is (the price index) CPI of tomorrow”, indicated Peter Cardillo, of Spartan Capital, referring to the indicator which will inform on the trajectory of inflation in the States. -United. “The combination of the two is weighing on stocks,” the analyst explained.
Wall Street remains convinced that the American central bank (Fed) will continue its monetary tightening at a pace not seen since 1994. The operators are even granting more and more credibility to the scenario of a double hike of 0.75 percentage points during July and September meetings.
However, the American indices resisted, to the point of briefly passing all three in the green at the start of the session, before the Nasdaq and S&P 500 fell slightly.
For Karl Haeling, of LBBW, with the fall in commodities, oil in mind, “investors are putting money back into stocks, and the American market is the one that benefits the most”.
Wall Street is thus benefiting from the health of the American economy, in a slowdown phase but significantly better than in Europe or in many other regions of the world.
The market welcomed the results of the agri-food giant PepsiCo (+0.30% to 170.98 dollars), with sales and net profit above expectations. The group, which was driven by snacks and cereals, raised its sales growth forecast for the entire financial year, excluding acquisitions.
“It’s a good signal”, commented Peter Cardillo, “but PepsiCo is a defensive value (less sensitive to the economic situation), so a recession would not really impact it”.
Gap plunged (-5.02% to 8.32 dollars) after the textile group announced the departure of general manager Sonia Syngal, whose strategic initiatives failed to recover sales.
The Twitter logo on a screen at the New York Stock Exchange on July 11, 2022 (GETTY IMAGES NORTH AMERICA/AFP/Michael M. Santiago)
The company, which includes the Gap, Old Navy, Banana Republic and Athleta brands, also warned that it expects sales to fall 5 to 10% in the second quarter (May to July), as well as an operating margin. zero or slightly negative.
After hitting its lowest point in four months on Monday, Twitter offered itself a rebound (+2.36% to 33.42 dollars), while the management of the social network told Elon Musk that it considered his renunciation as ” invalid and unjustified”.
Peloton was picking up speed (+4.60% to 9.33 dollars), after announcing that it would no longer produce its exercise bikes and treadmills itself, to rely now mainly on sub- dealing with Taiwanese Rexon. A decision which aims, according to general manager Barry McCarthy, to simplify its supply chain and reduce its fixed costs.
In the wake of crude prices, oil stocks sank, like Occidental Petroleum (-5.01%) or Marathon Oil (-3.14%).
© 2022 AFP
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