2023-12-22 22:42:18
(Photo: Getty Images)
MARKET REVIEW. World stock markets rose very modestly on Friday, welcoming the stronger-than-expected slowdown in American inflation without much commotion, because it confirms a scenario already favored by investors.
To (re)consult market news
Stock market indices at closing
In Toronto, the S&P/TSX advanced +115.46 points (+0.56%) to 20,881.19 points.
In New York, the S&P 500 garnered +7.88 points (+0.17%) to 4,754.63 points.
The Nasdaq ended up +29.11 points (+0.19%) at 14,992.97 points.
The DOW fell -18.38 points (-0.05%) to 37,385.97 points.
The loon rose by +US$0.0001 (+0.015 1%) to US$0.7535.
The oil fell -US$0.40 (-0.54%) to US$73.49.
L’or closed up +US$13.20 (+0.64%) to US$2,064.50.
The bitcoin lost -US$273.48 (-0.62%) to US$43,711.95.
The context
Inflation fell sharply in November in the United States, to 2.6% over one year, thus getting closer to the 2% objective, according to the PCE index, a gauge favored by the American Federal Reserve.
And October’s downward revision showed that inflation had actually already fallen below 3.0% year-on-year, to 2.9%.
The increase in the underlying index, excluding energy and food, is still above 3%, but it has slowed more than expected to 3.2% year-on-year once morest 3.4% the previous month.
Consumer spending, household income and orders for durable goods increased, also surprising analysts. This confirms the robustness of consumption in the United States, the main engine of growth in the world’s largest economy.
“This report is the best economic news in a long time, and comes just in time for the holiday season,” said Robert Frick, an economist at Navy Federal Credit Union.
It confirms the markets’ hopes for a soft landing for the economy, which would allow the American central bank to lower its rates next year.
For Valentine Ainouz, strategist and head of global bond strategy at the Amundi Investment Institute, “the Fed’s mantra of higher interest rates for longer is buried.”
The market reaction, however, is very measured, because “it was very anticipated,” according to her.
For Ms. Ainouz, the current level of the markets corresponds to a situation of “rapid return of inflation to 2%, without recession” of the American economy.
On the bond market, interest rates on government borrowings remained rather stable. Around 5:15 p.m., the yield on ten-year United States Treasury bonds stood at 3.89% as the day before.
Nike stumbles
Nike (NIKE) announced Thursday evening a plan of two billion US dollars in savings as well as a downward revision of its annual sales forecasts. The sports giant saw uneven sales performance in the most recent quarter, up in China but down in the United States. A slowdown which is expected to continue, and which worries the retail sector.
The company’s action dropped 11.83% on Wall Street.
Prosus suffers the fall of Tencent
The Dutch technology investment fund Prosus (PRX.AS, -13,38%) was penalized by the plunge of more than 12% in Tencent, following China’s announcement of new restrictions on online games.
Oil down slightly, bitcoin down
Oil prices ended slightly lower following hesitating on Friday, in a context still marked by tensions in the Red Sea.
The price of a barrel of North Sea Brent dropped 0.40% to 79.07 US dollars ($US).
Its American equivalent, the barrel of West Texas Intermediate (WTI) fell 0.44% to US$73.56.
On the foreign exchange market, the euro was stable once morest the greenback at US$1.1012 per euro (+0.01%).
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