Wall Street ends in scattered order, a little reassured on the Fed

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UPDATE DAY

The New York Stock Exchange ended in disarray on Thursday, thanks to a late-trading rebound following statements by members of the American central bank (Fed), which spoke of a smaller rate hike than expected in July. 

The Dow Jones lost 0.46%, the Nasdaq index edged down 0.03%, and the broader S&P 500 index fell 0.30%.

The market reacted to statements of two members of the Federal Reserve, Governor Christopher Waller and the chairman of the St Louis branch, James Bullard, who both spoke on Thursday for a 0.75 percentage point hike in the key rate in the next meeting of July 26 and 27.

“They have insisted publicly in recent months to take precedence over inflation” and raise rates, said Christopher Vecchio of DailyFX. “So the fact that they are both suggesting that 0.75 points is appropriate gives the market reason to reconsider the idea that a one point rise is in the works.”

Wednesday , investors had reacted badly to the release of a much better than expected CPI price index and were betting that the Fed would instead opt for a one-point hike in July, a first in the modern era.

< p>After the central bankers went public, they again favored the 0.75 point hypothesis.

For Quincy Krosby, of LPL Financial, Wall Street was also sensitive to other comments by Christopher Waller, who estimated that the economy was not in recession and that it would even continue to grow, at a slower pace.

The analyst nevertheless warned that nothing was still played as for the meeting of July, certain indicators being able to modify the opinion of the central bankers.

The market will notably follow the results of the University of Michigan survey on consumer confidence, which asks them in particular about their 5-year inflation forecasts.

“If these forecasts rise significantly significantly, it's going to get tough for the Fed,” she said.

Overall, investor sentiment remains low, and most of the data released on Thursday only added to the gloom.

Before the opening, banks JP Morgan Chase (-3.49%) and Morgan Stanley (-0.39%) had each published results below analysts' forecasts, whether for revenue or profit. net.

In question, the brake on investment banking, while 2021 had been a good year for IPOs and mergers and acquisitions.

JP Morgan Chase also saw its result affected by the increase in provisions for bad debts, a sign of a slight deterioration in the economy, while the bank had, on the contrary, released reserves at the same time last year .

The market is expecting many companies to deliver disappointing results, which should lead to a “value recalibration” of stocks lower, according to Quincy Krosby.

The day's macroeconomic indicators have only weighed down the climate a little more.

New weekly jobless claims rose again, to 244,000, a figure higher than economists' expectations.

As for the producer price index (PPI) for June, it also came out above forecasts, at 1.1% over one month, against 0.8% expected, which indicates, according to Mahir Rasheed, from Oxford Economics, that there is “more inflation in the pipes”.

The end-of-session rebound benefited Apple (+2.05%) and Microsoft (+0, 54%), with most very large caps ending in the green.

The Nikkei agency reported Intel's intention (+1.34%) to raise its prices, which benefited the entire semiconductor sector, be it Qualcomm (+4.62%), Broadcom (+0.60%) or AMD (+1.39%).

The Shares of US pharmaceutical group Novavax plunged 26.20% to $51.62 after the European Medicines Agency issued a notice citing cases of severe allergic reactions to its COVID-19 vaccine .

In the wake of JP Morgan Chase and Morgan Stanley, banks have backtracked, from Goldman Sachs (-2.95%) to Bank of A merica (-2.30%).