New York (AFP) – The New York Stock Exchange ended higher on Friday, increasingly convinced by indicators that a contained cooling of the US economy is possible, with an end to monetary tightening in sight.
The Dow Jones rose 0.08%, the Nasdaq index gained 0.95%, and the broader S&P 500 index gained 0.25%.
The tone of the session was set by the release of the PCE price index, which showed that inflation had slowed in December, to 5% year on year, from 5.5% the previous month.
Economists warn that “if inflation slows, it remains far too high to satisfy the Fed (US central bank)”, explained Oren Klachkin, of Oxford Economics, which should encourage the institution to raise its rates further.
But the market sees the US economy avoiding too deep a recession, which it feared from the Fed’s forced market monetary tightening since last spring.
“There is definitely room for a soft landing,” said Art Hogan of B. Riley Wealth Management.
Operators also noted on Friday the 0.2% contraction in consumption over one month, more than the 0.1% expected.
“We expect consumption to be soft in the first quarter, but not to turn around,” explained Ian Shepherdson of Pantheon Macroeconomics, a scenario that would satisfy the stock market but also the Fed, which seeks to curb consumption.
The institution’s monetary policy committee meets next Tuesday and Wednesday and Wall Street expects it to raise its key rate by a quarter of a point following its talks.
The decline in consumption was put into perspective by the consumer confidence index, published by the University of Michigan, which came out above projections, at 64.9 points once morest 64.6.
“Economic data this week has been good, earnings are better than feared and bond yields are calming down,” Art Hogan said.
After months of a rollercoaster ride, bond rates indeed seem to be stabilizing. On Friday, the yield on 10-year US government bonds stood at 3.51%, once morest 3.49% the day before closing.
On the equities side, the New York market experienced some disappointments with companies this week, at Intel, Microsoft, Dow or Hasbro, it was also entitled to some satisfaction, in particular Tesla, AT&T or Texas Instruments.
On Friday, Wall Street welcomed results from Visa and American Express, which both said they saw no weakening in consumption.
AmEx (+ 10.54% to 172.31 dollars), announced that it expects growth in its turnover of between 15 and 17% in 2023 and forecasts a net profit higher than analysts’ forecasts so far.
He was sought following on Friday, despite a quarterly result and profit below expectations.
Investors also welcomed the results of Visa (+2.99% to 231.44 dollars), above their expectations, which were driven by the acceleration of tourism and travel abroad.
In a session favorable to technology stocks, Intel was a bad student (-6.41% to 28.16 dollars), weighed down by a net loss of 700 million dollars in the fourth quarter, well above the 80 million expected by the analysts.
The group of Santa Clara (California) suffered a further slowdown in sales in the two most important activities of the company, namely components for desktop and laptop computers, as well as those supplied to the storage centers of data (data centers).
The oil company Chevron was penalized (-4.44% to 179.45 dollars) for its quarterly net profit significantly below expectations, impacted by asset write-downs of 1.1 billion dollars.
The toymaker Hasbro (-8.11% to 58.61 dollars) paid the announcement of quarterly sales down 17%, according to preliminary data. To cope with the slowdown in sales, the group will cut 1,000 jobs, or around 15% of its workforce.
The group of hygiene and cleaning products Colgate-Palmolive fell (-5.22% to 71.59 dollars) despite results above forecasts.
© 2023 AFP
