Wall Street closes higher after bond yields ease

The New York Stock Exchange concluded on Wednesday clearly in the green, favored by an easing in bond rates which carried technology stocks.

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According to final results at the close, the Dow Jones index gained 1.01% to 34,564.59 points, the tech-heavy Nasdaq jumped 2.03% to 13,643.59 points and the S&P 500 rose. advanced 1.12% to 4446.59 points.

The indices showed “some resilience following another tougher-than-expected inflation reading and as the earnings season kicked off with mixed results,” Schwab analysts summed up.

US wholesale price inflation (PPI index) accelerated last month, driven by energy prices.

Over one year, at +11.2%, this is the strongest acceleration since this index began to be published in 2010.

This announcement follows the publication on Tuesday of a jump in the general consumer price index (CPI), the highest in forty years, at 8.5% over one year.

Bond yields had reacted very strongly, at the start of the week, to inflation and to the outlook for the US central bank (Federal Reserve, Fed) to tighten their screws, climbing sharply to 2.78%. On Wednesday, they were at 2.69% around 8:00 p.m. GMT.

“Bond rates have gone up too fast, too far, too suddenly,” according to Gregori Volokhine of Meeschaert Financial Services.

FHN Financial’s Chris Low said “the inflation numbers were certainly bad, but they’re behind us and the market felt a bit oversold ahead of a long weekend,” as markets close for Good Friday. .

Some analysts also had a more optimistic reading of inflation which would have reached “the possibility of a peak”, noted Mazen Issa, of TD Securities.

But for Gregori Volokhine, it was necessary to pay attention to the words of James Bullard on Wednesday. The chairman of the St. Louis Fed said in an interview with the Financial Times that it was “imaginary” to believe that the Fed could sufficiently reduce inflation without raising rates to a level that is restricting the economy.

“In other words, when the Fed promises to raise rates without causing a recession, this member of the Fed says: ‘Be realistic!’”, translated Gregori Volokhine.

“There won’t necessarily be a recession, but it’s still a possibility,” added the analyst.

As for values, JPMorgan, the first major American bank which unveiled its results for the first quarter, disappointed. Its turnover fell by 5% to 30.7 billion dollars.

Its net profit fell 42% to $8.3 billion. The bank also suffered a $524 million loss related in part to Russia’s invasion of Ukraine.

The title dropped 3.24% to 127.28 dollars. Citigroup, which will announce its results on Thursday, dropped 0.38% and Goldman Sachs gained 0.82%.

The airline Delta Airlines was welcomed, however (+ 6.27% to 41.04 dollars) thanks to better than expected results in the first quarter, benefiting from a demand described as “phenomenal” by its leader.

The company’s revenue was $9.3 billion from January to March, better than the $8.9 billion expected by the market. Other airlines followed suit: American Airlines soared 10.62% and United Airlines 5.64%.

The big names on the Nasdaq, which are very sensitive to changes in interest rates, have also regained strength, such as Google (Alphabet +1.49%), Amazon (+3.15%), Tesla (+3.59%) or Twitter (+3.08%).

Home goods chain Bed Bath and Beyond fell 1.17% to $17.76, after plunging nearly 8% earlier on news of a quarterly loss sparked by stockouts. supply chain.


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