Wall Street opens higher, boosted by falling bond yields


The floor of the New York Stock Exchange (AFP/ANGELA WEISS)

The New York Stock Exchange opened higher on Tuesday, ready for a rebound after several sessions in the red, thanks to statements by a member of the American central bank (Fed), a drop in bond rates and a bargain hunt.

Around 1:55 p.m. GMT, the Dow Jones gained 0.95%, the Nasdaq index gained 1.67% and the broader S&P 500 index appreciated by 1.26%.

On Monday, the Dow Jones and S&P 500 ended the day at a year-end low. The first had even entered the “bear marker”, an important threshold for traders, which means that it has lost at least 20% since its peak in early January.

Investors noted the statements of the president of the Chicago branch of the Fed, Charles Evans, who said he was “nervous” at the idea of ​​chaining the massive increases in the key rate of the Federal Reserve (Fed) without pause to assess the impact on the economy.

“It’s the first time in months that a member of the Fed has given the market a little hope”, commented Gregori Volokhine, of Meeschaert Financial Services, while recalling that Charles Evans is known for his accommodating positions on the plan. monetary.

For the manager, the rebound is also explained by the ability of the S&P 500 to rely on certain technical thresholds to start back up.

After five consecutive sessions of decline, Wall Street was also stimulated by cheap purchases, which notably benefited the largest capitalizations of the New York Stock Exchange.

The first six capitalizations of the Nasdaq, which weigh more than 40% of the index, were all up, whether Apple (+1.87%), Microsoft (+1.01%), Amazon (+1 .37%), Alphabet (+0.87%), Tesla (+4.01%) or Meta (+0.94%).

“In a + oversold + market, which falls every day, there are always rebounds”, underlined Gregori Volokhine, without this jerk of the kidneys predicting the trajectory of the indices in the medium term.

Another illustration, the most volatile values ​​of the rating took off, from Coinbase (+6.70%) to Lucid (+4.94%), via AMC (+7.34%), Nvidia (+3.10 %) or Uber (+5.24%).

“There’s going to be a rebound,” said Patrick O’Hare of Briefing.com, “but its ability to hold through to the close could depend heavily on the bond and currency market.”

After a very sustained rise, bond rates observed their first marked drop in weeks. The yield on 10-year US government bonds, which had reached a 12-year high on Monday, contracted on Tuesday to 3.89%, against 3.92% the day before.

Even more conspicuous, the decline in the 2-year rate, to 4.26% against 4.34% on Monday.

Goldman Sachs analyst Christian Mueller-Glissmann said on Tuesday that while equities had long benefited from the fact that there were few investment alternatives in the current environment, bonds were now more attractive.

For Gregori Volokhine, the fact that the big Wall Street houses are very pessimistic about stocks indicates that they have already sold. “It’s times like these that real rebounds can happen,” he says.

Operators also welcomed the publication of durable goods orders for August, which fell 0.2% in the United States, less than the 0.5% decline expected by economists.

Even if inflation somewhat truncates the evolution of orders, “it is still encouraging to see manufacturing activity remain rather vigorous in this macroeconomic context”, reacted Oren Klachkin, of Oxford Economics, in a note.

© 2022 AFP

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