NYSE in the Green: Contrasting Data Shows Potential for Fed Rate Cuts

2023-12-22 14:46:17

PARIS, December 22 (Archyde.com) – The New York Stock Exchange is slightly in the green on Friday following the publication of contrasting statistics which nevertheless show a slowdown in inflation in the United States, which reinforces the prospect of a rate cut of the American Federal Reserve (Fed) next year.

About ten minutes following the first exchanges, the Dow Jones index gained 56.19 points, or 0.15%, to 37,460.54 points and the Standard & Poor’s 500, broader, increased by 0.32% to 4,762, 41 points.

The Nasdaq Composite gained 0.31%, or 46.24 points, to 15,010.11.

An hour before the opening of Wall Street, the US Department of Commerce published an indicator which shows in November that household consumption expenditure increased (+0.3% over one month), as did their income (+0 .4%), while the PCE price index fell by 0.1% over one month, to show a slowdown of 2.6% over one year.

These contrasting data underline the strength of the American economy but also a decline in inflationary pressures, the overall and basic PCE being below the Archyde.com consensus.

“Today’s data is clearly better and the inflation trend is in the right direction, whether we look at core PCE or core PCE,” notes Art Hogan, chief market strategist at B Riley Wealth .

The durable goods indicator showed an increase of 5.4% in November, which is higher than the consensus which predicted +2.2%.

In the bond market, traders estimate an 82.5% probability of a cut of at least 25 basis points in Fed rates in March. They forecast that borrowing costs will be cut by 125 basis points by September 2024.

In terms of values, Nike fell 10.52% following announcing Thursday evening a two billion dollar savings plan and revising downwards its annual sales forecast. In its wake, Foot Locker lost 5.32%.

Electronic Arts (-0.15%), Netease (-19.57%) and Tencent Music Entertainment Group (-4.08%) are in the red following China’s announcement of a regulatory project aimed at limiting expenses related to video games.

Karuna Therapeutics, manufacturer of drugs once morest schizophrenia, soars 47.32% following the announcement of its acquisition by Bristol Myers Squibb (+0.84%) for 14 billion dollars (12.7 billion euros) .

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(Written by Claude Chendjou, edited by Blandine Hénault)

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