Wall Street up, the Fed worries less

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(Boursier.com) — The New York Stock Exchange was expected to be on the rise in early trading on Friday, as investors are more calm about the US Federal Reserve’s intentions. Two well-known members of the Fed, Christopher Waller and James Bullard, yesterday came out in favor of raising rates by 75 basis points this month, not 100 points – a more aggressive scenario than Wall Street had started to be considered in the wake of the burning inflation report published on Wednesday. At the same time, fears of recession still hang over the financial markets, fueled by the contraction of the Chinese economy and mixed results in the United States.

Futures are signaling a 0.84% ​​gain for the Dow Jones0.67% for the Standard & Poor’s-500, wider. the Nasdaq should start with a rise of 0.69%.

In Europe, the markets are trying to end the week in the green, after a complicated session on Thursday. In Paris, the CAC 40 0.69% to 5,956 points around 3 p.m. In Frankfurt, the Dax takes 1.64% and in London, the Footsie gives itself 1.01%. The scholarship of Milano gained 1.22% despite the risk of a domestic political crisis in the continent’s third-largest economy.

Reassured by the Fed?

Investors were shaken this week by news of a new surge in inflation in the month of June in the United Statesthen a sharp rise in producer prices, which reignited doubts about the Federal Reserve’s strategy, with fears of a more aggressive monetary policy at its next meeting on June 26 and 27.

But the latest statements by Christopher Waller, Governor of the Fed, and James Bullard, President of the St. Louis Fed, have calmed things down. The latter, among the most “hawkish” members of the American central bank, are supportive of another 75 basis point interest rate hike at the July 27 monetary policy meeting, not a bigger hike.

Markets will be watching US retail sales and industrial production numbers ahead of the opening on Wall Street.

China is not too worried

Investors seem to be ignoring the confirmation of the sharp deterioration in the Chinese economy, or else this was probably already priced in… It contracted sharply in the second quarter due to the impact of multiple lockdowns: GDP fell by 2.6% over the April-June period compared to the previous three months. In the first quarter, GDP in the world’s second-largest economy rose 1.4% according to revised official data. On an annual basis, growth thus fell to 0.4%, whereas it reached 4.8% in January-March.

The dollar retreats

the dollar fell slightly compared to a benchmark basket (-0.28%) after a 20-year high the day before, favored by expectations of a rate hike in the United States and its status as a safe haven asset. L’euro back up around $1.006.

Oil

The oil market is on the rise, based on the hope of less sustained rate hikes in the United States. the Brent takes 1.97% to $101.05 a barrel and US light crude (West Texas Intermediate, WTI) 1.46% to $97.18.

Values

Citigroup posted a 27% drop in second-quarter profit on Friday. The third-largest US bank increased its provisions for potentially bad debts and its investment banking business suffered from a slowdown in corporate transactions. The stock rose 5% ahead of the stock market.

Wells Fargo lost 0.8% pre-market. The American bank announced Friday a drop in its profit in the second quarter. It has increased its provisions for bad debts while the rise in interest rates is slowing down its mortgage activities.

BlackRock (-2.3%). The world’s largest asset manager on Friday posted second-quarter earnings down 30% in a period marked by renewed investor risk aversion amid tighter monetary policy. the Fed.

pinterest gained 14% ahead of the US markets open as the Wall Street Journal reported that activist fund Elliott Management has a stake of more than 9% in the image-sharing platform.

Virgin Galactic, Richard Branson’s space tourism company has announced that it will set up a new factory in the Greater Phoenix, Arizona area to manufacture Delta-class spacecraft. The title gains 1.6% in pre-market.

Ali Baba (stable). Executives from Alibaba’s cloud computing division have been summoned by authorities in Shanghai after police leaked data on nearly a billion Chinese citizens, the Wall Street Journal reported. Hong Kong-listed Alibaba stock 9988.HK fell 6%, its biggest drop in a month.

Amazon (+1.2%) began to reduce the number of products sold under its own brands due to weak sales, the Wall Street Journal reported.

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