Market Review: Stock Market Indices Soar, Inflation Decelerates – Latest Updates and Analysis

2023-07-28 21:48:46

(Photo: Catherine Charron)

MARKET REVIEW. The New York Stock Exchange ended up on Friday, spurred by new signs of deceleration in inflation and corporate results deemed generally satisfactory.

The Toronto Stock Exchange closed Friday up more than 100 points, supported by gains in the energy, information technology and health sectors, while the major American indices also rose.

To (re)consult market news

Stock market indices at closing

In Toronto, the S&P/TSX increased by +133.90 points (+0.66%) to 20,519.37 points.

In New York, the S&P 500 rose by +44.82 points (+0.99%) to 4,582.23 points.

The Nasdaq ended up +266.55 points (+1.90%) at 14,316.66 points.

The DOW closed up +176.57 points (+0.50%) at 35,459.29 points.

The loon dropped -US$0.0017 (-0.2309%) to US$0.7547.

The oil was up +US$0.49 (+0.61%) to US$80.58.

L’or ended up +US$12.50 (+0.63%) at US$1,997.70.

The bitcoin rose +US$203.50 (+0.70%) to US$29,335.34.

The context

Inflation slowed further in June in the United States, to 3.0% over one year in June, according to the PCE index, favored by the American central bank (Fed).

Excluding food and energy, inflation still reached 4.1%, but it came out well below the 4.6% recorded in May, but also slightly below the 4.2% expected by economists.

After the release of these numbers, “we don’t see any further rate hikes from the Fed by the end of the year, but central bankers won’t hesitate to turn the screw around once more if the coming data surprised on the rise”, commented, in a note Oren Klachkin, of Oxford Economics.

Taking note, bond rates eased. The yield on 10-year US government bonds fell to 3.95% from 3.99% the day before closing.

“All week, the information we have received suggest an ideal scenario for the economy”, that of a gradual downgrade, without braking, summarized Angelo Kourkafas, Edward Jones.

“Inflation is slowing, consumers are continuing to spend, and corporate results have been decent,” he said, “the combination of which is good for the market.”

The consumer confidence index jumped to 71.6 points in July, from 64.4 points the previous month, according to the University of Michigan survey, released on Friday.

After pausing for the past few weeks, the big fish on the Nasdaq regained control on Friday, especially Meta (META, +4.42%), Tesla (TSLA, +4,42%) or Microsoft (MSFT, +2,31%).

Among the values ​​of the new economy, the New York place also celebrated the specialist in data analysis Palantir (PLTR, +10,28%)one of the flagships of artificial intelligence, following a favorable rating from analysts at Wedbush Securities.

As for the Dow Jones, it was pushed in the back by the giant of hygiene and maintenance products Procter & Gamble (PG, +2,83%)whose results shattered expectations in the fourth quarter of its staggered fiscal year, completed at the end of June, mainly thanks to further price increases.

The Cincinnati (Ohio) company even expects, for its 2024 financial year (started in July), higher growth (from 3 to 4%) than that of the previous one (2%).

Another driver of Wall Street’s flagship index, Intel (INTC, +6,60%), whose return to profit following two quarters in the red surprised analysts, who were expecting another loss in the second quarter. The Santa Clara (California) group benefited from a slight firming up in demand for computers and servers for data storage centers.

The Dow Jones, on the other hand, might not count on oil companies Exxon Mobil (XOM, -1,80%) et Chevron (CVX, -0,49%) which suffered from sharply declining results in the second quarter, following an exceptional 2022 vintage, marked by the Russian invasion of Ukraine and the surge in black gold prices.

Although it exceeded expectations for its net profit, Chevron was hardly better off than its rival ExxonMobil, whose result came out below expectations.

The car manufacturer Ford (FORD) moved back (FORD, -3,39%)despite better-than-expected results in the second quarter, supported by its prices, and an increase in the annual forecast, some investors worried regarding the losses generated by the entity dedicated to electric vehicles.

The Chinese electric vehicle manufacturer XPeng (XPEV)listed on Wall Street, was still wanted (XPEV, +15.68%) following the announcement on Wednesday of a partnership with Volkswagen.

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