(CercleFinance.com) – Wall Street moved without any real trend on Wednesday despite the decline in bond yields, fueled by growing optimism regarding Fed policy after an employment figure that was worse than expected.
At the end of the morning, the Dow Jones gained 0.1% to 38,511.7 points, setting a new record in the process, while the Nasdaq Composite fell 1.5% to 15,281.3 points, mainly weighed down by the fall in Alphabet (-6%).
The main element of support for the trend, the ADP survey published this morning showed that the American private sector had generated only 107,000 new jobs in January.
This figure is clearly below economists’ expectations, of around 150,000, but also down sharply compared to the 158,000 of the previous month.
As a result, this much worse statistic than expected revives hopes that the Fed may soon have to relax its monetary policy, after the ‘status quo’ expected today.
According to the CME’s Fedwatch barometer, traders now anticipate with a probability of 61% a Fed rate cut of 25 basis points in March, compared to 40.4% yesterday.
On the bond front, Treasuries are falling into euphoria with a fall of 9.5 points to 3.96% in the yield on ten-year paper a few hours after the Fed press release.
The dollar is affected and corrects by 0.3%, which allows the euro to rise towards 1.0880 against the greenback.
Publications of results also continue to punctuate discussions.
Microsoft (-0.9%) and Alphabet (-6.2%) are thus suffering profit-taking after their exceptional performance in recent months, after having reported solid quarterly results yesterday evening.
On the energy market, a barrel of Texan WTI crude fell 1.5% to 76.6 dollars following the announcement of a slight increase in oil stocks this week in the United States.
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