(CercleFinance.com) – The New York Stock Exchange accentuated its rebound on Thursday following the publication of economic figures which reinforced the prospect of an upcoming drop in interest rates.
At the end of the morning, the Dow Jones rose 0.8% to 38,051.7 points, while the Nasdaq Composite rose 0.5% to 15,763.4 points.
The major New York indices opened higher this morning, beginning a recovery after four consecutive sessions of decline, but their gains were further amplified in the wake of the publication of the Conference Board’s leading indicators.
This index – supposed to foreshadow the evolution of economic activity in the United States – actually started to decline again in March, with a decline of 0.3% last month following an increase of 0.2% in February .
In its press release, the ConfBoard evokes ‘fragile’, even ‘recessionary’, prospects for the American economy, which it considers penalized by high household debt, high interest rates and persistent inflation.
From its point of view, growth should tend to slow down in the second half of the year, which leads the employers’ organization to anticipate a deceleration in GDP growth in the second quarter, then in the third quarter.
This worrying observation could, however, lead the American Federal Reserve to intervene in order to support activity, with the market still counting on two rate cuts by the end of the year.
A sign of improving investor morale, the VIX index measuring volatility in the United States, which had reached almost six-month highs recently, fell by almost 5% to less than 17.4.
On the bond market, the yield on ten-year Treasury bills stands at 4.63%, up almost five basis points, but its rise is put into perspective by operators.
‘We can clearly see that the sequence of rate cuts is postponed rather than dismissed, which leads us to still anticipate a yield on Treasuries of around 3.85% at the end of the year’, note the teams at UBS.
On the value side, Netflix (+0.8%) is back close to its absolute records a few hours before the publication of its first quarter results, which should show solid performance according to professionals.
The Tesla stock shows one of the biggest declines in the S&P 500 index, Deutsche Bank having downgraded the value, worried about the consequences of postponing the launch of the ‘Model 2’ and the priority now given to the ‘Robotaxi’.
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