(CercleFinance.com) – Wall Street doubled its gains during the last 75 minutes of the session, with a sudden acceleration around 7:45 p.m. while an element of language distilled during his press conference, Jerome Powell reinforced the feeling that the cycle of monetary tightening is over: there were fireworks on the bond market.
On the stock side, it’s not bad either: the S&P500 jumped by +0.5% to +1.05%, the Nasdaq by +0.7% to +1.65%, the Dow Jones gained + 0.67% to register a few seconds from the close at the highest at 33,275.
The Nasdaq benefited from a strong return on AMD +9.7%, Dexcom +6%, Nvidia and Micron +3.8%, Meta +3.5%, Amazon +2.9%, Tesla +2, 5%, Microsoft +2.4%, Apple and Alphabet +1.9% (the ‘fantastic 7’ are there and they all outperformed their benchmark indices).
The FED maintained – as planned – for a second consecutive summit (FOMC) its key rates unchanged (the main rate at 5.25/5.50%), a decision taken ‘unanimously’.
This was the expected scenario, given the geopolitical climate and the signs of difficulty in certain sectors of activity (commercial real estate, with the bankruptcy of We-Work, cash-hungry biotechs, regional banks, etc.) and more generally small and medium-sized businesses, weighed down by the cost of money, with a Russell-2000 down -7.5% since January 1.
The FED says it remains very attentive to inflationary pressures, and is not certain that the fight is over, which means that a ‘pivot’ is not imminent.
The reaction of the US bond markets was unspectacular for 45 minutes (from 7 p.m. to 7:45 p.m.), an easing of yields was already in place before the announcement… but everything accelerated at 7:45 p.m. and the T-Bonds at 10 years show -14Pts at 4.735%, the ’20 years’ -11.5Pts at 5.105%, the ’30 years’ -9.2Pts at 4.931%… and at the other end of the spectrum, the ‘2 years’ is also relaxes by -12.3Pts to 4.948%, the ‘1 year’ by -8Pts to 5.375%.
Here again, the last hour really made the difference!
In terms of ‘macro’ figures, the picture was rather mediocre: the private sector in the United States only generated 113,000 new jobs in the month of October, according to the monthly survey published this Wednesday by ADP, a specialist in outsourcing. of human resources management.
The leading index of manufacturing activity: the ISM contracted for the 12th consecutive month in the United States in October, with a pace which even increased compared to the previous month, to 46.7 last month against 49 (the ISM was expected unchanged).
The most marked declines affect the sub-indexes measuring new orders (fall from 49.2 to 45.5) and employment (46.8 against 51.2), both of which fell below the 50 point mark which separates contraction and growth of activity.
The picture is hardly different from the S&P Global manufacturing PMI, which ultimately came out at 50 for the past month, in line with its flash estimate and after 49.8 for September.
Also note the sharp drop in oil of -1% towards $80.7 on the NYMEX, the lowest since August 29.
No notable change in the status of weekly crude oil inventories in the United States: data published by the United States Energy Information Administration (EIA) shows that crude oil inventories in the United States rose to 421.9 million barrels during the week of October 23, marking a modest increase of 0.8 million barrels compared to the previous week.
Stocks of distilled products – including domestic fuel oil – fell symmetrically by 0.8 million barrels, while gasoline stocks increased by an anecdotal 0.1 million barrels, still compared to the previous week, continues the agency.
Finally, the EIA specifies that refineries operated at 85.4% of their operational capacity during the same week, with an average production of 9.5 million barrels/day.
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