The floor of the New York Stock Exchange (GETTY IMAGES NORTH AMERICA/AFP/SPENCER PLATT)
The New York Stock Exchange lost momentum on Friday, moving in mixed order, after a speech by Jerome Powell, chairman of the Federal Reserve, saying that inflation remains “too high” and that the Fed is “ready to raise the rate if necessary”.
After starting unanimously in the green, the clues were changing. The S&P 500 yielded 0.05%, the Dow Jones advanced by 0.49% and the Nasdaq by 0.20% around 3:40 p.m. GMT.
“Admittedly, inflation has slowed from its peak but it remains too high. We are ready to raise interest rates further if necessary and intend to maintain a restrictive monetary policy until we are certain that inflation is moving sustainably towards our target,” Jerome Powell told the central bankers’ conference in Jackson Hole, Wyoming.
“Jerome Powell spoke and I don’t think one can be too surprised at what was said but it caused some volatility in the markets,” commented Craig Erlam of Oanda.
“Although it is far from certain that there will be another rate hike, traders are increasingly accepting the idea that rates will remain at this level for longer than expected,” added the analyst. .
For Ian Shepherdson of Pantheon Macroeconomics, “the speech does not bring much new”. “Economic data is going in the right direction but not definitively. It will all come down to the data. We think they’re done with rate hikes but it’s still a 60/40 decision,” he said. the expert.
Last year during this annual meeting organized by the Fed in the mountain resort of Wyoming, Jerome Powell had caused the markets to fall sharply by announcing that the fight against inflation – at the time at 8.5 %–, would “paint”.
In eighteen months, the Fed has raised rates 11 times to drive them up from zero to 5.50%. The cost of real estate loans, for example, has risen to a peak in more than twenty years at more than 7.20% for standard thirty-year loans. Inflation stood at 3.2% in July, according to the CPI index.
On the bond market, ten-year rates were virtually stable at 4.24%. The dollar advanced more than before Mr. Powell’s speech at 1.0787 dollars for one euro (+0.21%).
On the side, Nvidia, the darling of the artificial intelligence sector which announced much better than expected results on Wednesday, lost ground (-3.39%) around 3:35 p.m. GMT.
Chipmaker Marvell Technology lost 8% as its second-quarter results came in only slightly above forecasts.
The specialist in credit purchase solutions Affirm Holdings soared by more than 26% having posted a greater than expected increase in its income. The company that offers solutions to “buy now and pay later” also reduced its loss.
Hawaiian Electric, at the center of controversy over its handling of power supply during the deadly fires in Hawaii, plunged 16%. The operator suspended the payment of a dividend to conserve cash.
The clothing chain Gap gained 5.40% while the decline in its quarterly sales was less strong than expected and the brand managed to generate a better than expected profit.
© 2023 AFP
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