2023-05-26 23:48:31
(Photo: Getty Images)
MARKET REVIEW. The New York Stock Exchange ended sharply higher on Friday anticipating a very soon agreement on the debt ceiling in the United States and ignoring for the moment the bad news on the side of inflation.
The Toronto Stock Exchange closed on Friday with a gain of nearly 150 points.
To (re)consult market news
Stock market indices at closing
The composite index S&P/TSX of the Toronto floor took 146.23 points to end the session with 19,920.31 points.
In New York, the average Dow Jones industrials gained 328.69 points to 33,093.34 points, while the broader index S&P 500 climbed 54.17 points to 4205.45 points. The composite index of Nasdaq for its part appreciated by 277.59 points to 12,975.69 points.
In the currency market, the Canadian dollar traded at an average price of 73.41 US cents, up from 73.38 US cents on Thursday.
On the New York Commodity Exchange, the price of oil Crude rose 84 US cents to US$72.67 a barrel, while natural gas fell 6 US cents to US$2.42 per million BTU.
The price ofor rose 60 US cents to US$1,944.30 per ounce and that of copper rose 9 US cents to US$3.68 per pound.
The context
As the window of opportunity narrows to avoid an American default, the White House and the Republican opposition continued Friday to build a compromise.
“We are closer (to an agreement), but it’s not done yet,” said a source close to the discussions, skeptical regarding the possibility of an announcement on Friday.
The deal would freeze some spending, but leave defense and veterans budgets untouched, the government reported. New York Times where the Washington Post.
“The market has climbed on the hope” that Republicans and Democrats “will announce an agreement very soon which will make it possible to avoid the default”, commented Peter Cardillo, of Spartan Capital.
The markets have surfed on this optimism and also continued to be carried by the enthusiasm that the development of artificial intelligence generates for technology stocks and those of semiconductor manufacturers.
However, an inflation indicator in the United States came as a surprise by accelerating more strongly than expected in April. The PCE index, the Fed’s preferred metric for measuring rising prices, rose 4.4% year on year, from 4.2% the previous month.
More worryingly, the underlying index, which excludes the volatile food and energy price sectors, accelerated to 4.7%.
The break goes away
These strong inflation figures considerably dampen the possibility of a sustained pause in interest rate hikes, as the markets had been pricing in, but the indices have not budged, remaining focused on the prospect of a political agreement. on the debt.
Inflation data “was very disappointing,” said Peter Cardillo. “Obviously, the rise in prices remains stubborn and once we have applauded an agreement on raising the debt ceiling, we will have to face these macro-economic data and be interested in what will happen next. the Fed,” added the analyst.
“Today’s inflation figure confuses ideas of a pause in rate hikes,” said Peter Cardillo once more as the Fed meets on June 13 and 14. “It’s not completely ruled out, but it will be a short break and the Fed will revisit the issue in July,” he said.
To add to the persistence of inflation, the IMF, which slightly raised its growth forecast for the United States on Friday to 1.7% in 2023, also warned that underlying inflation “will remain significantly above the 2% target (of the Fed) in 2023 and 2024”. The institution thus invites to keep interest rates at a high level between 5.25% and 5.5% “until the end of the year 2024”.
On the side, the chipmaker Marvell Technology (MRVL) soared 32.42% to US$65.51 on positive feedback on buoyant AI momentum. Nvidia (NVDA)an industry leader in dedicated AI processors, gained another 2.54% to US$389.46 following gaining more than 24% the previous day thanks to ambitious projections for the 2nd quarter.
In a gesture of sympathy with the semiconductor industry, the manufacturer Broadcom (AVGO) climbed 11.52% to US$812.73. A multi-billion dollar contract was announced Wednesday between Apple and Broadcom for the order of components used to capture 5G, the fifth generation of mobile phones. Apple (AAPL) gained 1.41% to US$175.43.
The troubled ready-to-wear brand Gap (GPS) soared 12.33% to 8.34 dollars following a surprise profit in the first quarter at the cost of all-out restructuring.
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