Wall Street up, digesting the Fed

The New York Stock Exchange is moving up on Thursday, on the way to a rebound after the fall of the previous day and digesting the meeting of the American central bank (Fed).

The Dow Jones index gained 0.80%, the technology-dominated Nasdaq 1.75% and the S&P 500 index 1.11% around 2:30 p.m. GMT.

The day before, after the announcement of a new rate hike of a quarter of a percentage point, the Dow Jones index had ended down 1.63% at 32,030.11 points, the Nasdaq had dropped 1.60 % to 11,669.96 points and the S&P 500 fell 1.65% to 3,936.97 points.

The Fed raised interest rates by just a quarter of a percentage point and, more importantly, signaled that it only considered one more such hike in the short term, which seemed to calm the markets THURSDAY.

Wall Street’s reaction was initially ambivalent as Fed chief Jerome Powell pointed out that the recent banking crisis had tightened financial conditions and acted as another rate hike, if not more.

“Such a tightening of financial conditions is in line with a rate hike. You can see that as the equivalent of a rate hike or maybe more than that,” Powell said at his conference. Press.

After the Federal Reserve, the Swiss National Bank announced a 50 basis point rate hike to 1.50%, as expected, and said the country’s banking crisis was over. The Bank of England (BoE) also raised its key rate on Thursday for the 11th consecutive time (+0.25 points to 4.25%).

Investors were also disappointed Wednesday by comments from Treasury Secretary Janet Yellen.

Before the US Senate, Yellen said there were no plans to greatly increase bank deposit coverage, currently limited to $250,000, as was done when two regional banks, including Silicon Valley Bank, made bankruptcy.

On Thursday, a jobs indicator lifted the market’s spirits with weekly jobless claims filings remaining well below 200,000 at 191,000, contrary to expectations.

This shows that the job market remains buoyant despite announcements of layoffs in the technology sector.

As for the real estate market, sales of new homes rose slightly in February to 640,000 on an annual basis. However, they remain down 19% over one year.

On the stock market, nine out of the eleven sectors of the S&P 500 were clearly in the green, led by communication (+1.95%) and information technology (+1.75%).

Thus the big names in tech, such as Meta, Google, Microsoft advanced by 2% to 3%.

The group of Jack Dorsey, Block (formerly Square) fell by 17.34%, attacked by the investment fund Hindenburg Research. In a document released on Thursday, Hindenburg argues that Block “misled investors by publishing overstated data” regarding its user numbers.

Co-founded in 2009 by the co-creator and former boss of Twitter Jack Dorsey, Block, which notably owns the Cash App application, is dedicated to financial transactions, ranging from payment at merchants to payments between individuals.

Cryptocurrency trading platform Coinbase tumbled nearly 16% as it faces lawsuits from the stock market’s watchdog, the SEC, for violating securities law.

On the bond market, yields on 10-year Treasury bills stretched very slightly to 3.46% against 3.43% on Wednesday.

© 2023 AFP

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