Wall Street closes in the green

(New York) The New York Stock Exchange closed clearly in the green on Wednesday, driven by technology and betting on a good surprise in American inflation on Thursday.

The Dow Jones index gained 0.45%, the tech-heavy NASDAQ gained 0.75% and the broader S&P 500 index gained 0.57%.

The communication services (+1.17%) and information technology (+1.00%) sectors finished first.

Apart from Tesla (-0.43%), the “Magnificent Seven” started to rise again, including shares Microsoft (+1.86%), Meta (+3.65%), Nvidia (+2.28%) and even Apple (+0.57%) which nevertheless received a third negative analyst rating in a row.

Amazon gained 1.56%. Its subsidiary Twitch, a video game platform in streamingwill cut 500 jobs, or 30% of its workforce.

On Thursday morning, investors will be watching for the publication of an indicator of December inflation in the United States. The CPI price index is expected to have risen 3.2% year-over-year in December, up from 3.1% the previous month, according to a MarketWatch consensus.

Core inflation, excluding volatile items such as energy or food, should fall to 3.8%, compared to 4% year-on-year in November, according to this median forecast.

“Without any real economic news on Wednesday, I think market participants are coming to terms with the idea that we may have a favorable price index on Thursday,” said Peter Cardillo, analyst at Spartan Capital.

In a speech in White Plains, New York Federal Reserve (Fed) President John Williams blew hot and cold on the Fed’s inflation expectations.

I think we will have to maintain a restrictive policy for some time to fully achieve our objectives. It will only be appropriate to reduce the degree of restriction when we are convinced that inflation is moving towards 2% sustainably.

John Williams, president of the Federal Reserve Bank of New York

At the same time, Mr. Williams considered “the recent indicators very encouraging”.

The stock market indices, which were a little higher in the green before this declaration, then slowed their progress.

For Bryant VanCronkhite, principal portfolio manager at Allspring Global Investments, “if the inflation data does not show that it is slowing, the market will digest that downward.”

The quarterly results season will begin on Friday with major banks.

Bank of America (-0.09%), JPMorgan (+0.21%) and Wells Fargo (-0.43%) are on the menu.

“There are real risks to corporate profits,” worries Bryant VanCronkhite. “I think that analysts’ forecasts are a little high in general,” said this manager to AFP, inviting stock market investors “to be more cautious than optimistic in the short term.”

Boeing returned to the skyline gaining less than 1% after the action was shaken following the setbacks of an Alaska Airlines 737 MAX which lost a door in mid-flight last week.

Its main supplier Spirit Aerosystems, which manufactures aircraft fuselages, has recovered (+4.49%).

The two securities remain 7% below their level before the incident, which grounded several dozen planes operated by different companies, including United Airlines (+1.03%) for inspections.

The cryptocurrency exchange platform Coinbase weakened (-0.46%) while awaiting the announcement after the market close, by the American financial markets watchdog (SEC), that new bitcoin investment products (ETF ) are now authorized on the market.

This investment product would directly track the price of cryptocurrency and allow a larger portion of the general public to invest in cryptocurrency without having to purchase it directly.

The day before, a hacker had anticipated the SEC’s decision by hacking the institution’s account on X.

Toronto on the rise

The Toronto Stock Exchange posted a modest gain on Wednesday, despite weakness in the energy and metals sectors. American markets, for their part, climbed while awaiting inflation data and the start of the quarterly results season.

Investors seemed optimistic before the inflation data was released, said Michael Currie, senior investment advisor at TD Wealth.

The data could be key to the Federal Reserve’s (Fed) monetary policy, as speculation in 2024 will focus on the timing and extent of central bank interest rate cuts, Currie believes.

“I think people are a little more optimistic and think that maybe the worst is behind them,” he analyzes, adding that January is generally a strong time of year for the markets. “The mood, I would say, is much more optimistic than I’ve seen in a long time. »

Toronto’s S&P/TSX Composite Index closed up 18.44 points, or 0.09%, at 20,989.42 points.

Markets appear to be expecting more cuts than the three the Fed is touting, Currie says. Markets could get a little ahead of the curve, but it’s also possible that the central bank will adopt a cautious tone to avoid inflating expectations.

What surprises Mr. Currie is how quickly bond yields have fallen in the United States and Canada since their peaks last fall. “We haven’t yet had a rate cut on either side of the border, but the market is already behaving as if it has been cut three or four times. I mean, it was drastic,” he judges.

On Friday, the financial results season in the United States will begin, with the big banks. Their quarterly results often have a big effect on the market, because they can be an indicator of the state of the consumer, Mr. Currie points out.

Energy fared poorly amid widespread enthusiasm, Currie notes. The price of oil is volatile at a time when concerns are being expressed for both supply and demand.

The main catalyst for Wednesday’s decline was the surprise increase in U.S. oil inventories, Currie says, when stocks were expected to have fallen.

On the currency market, the Canadian dollar was trading at 74.73 US cents, up from 74.68 US cents on Tuesday.

On the New York Mercantile Exchange, the price of crude oil fell 87 US cents to US$71.37 per barrel, while that of natural gas fell 15 US cents to US$3.04 per million barrels. BTUs.

The February gold price fell US$5.20 to US$2,027.80 per ounce and copper rose 2 US cents to US$3.78 per pound.

The Canadian Press

reference: www.lapresse.ca

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