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MARKET REVIEW. The New York Stock Exchange concluded with a sharp rebound on Thursday, pleased by inflation which is slowing in the United States and which suggests that the Fed’s rate hike cycle is nearing an end.
The Toronto Stock Exchange ended Thursday’s session with a gain of more than 100 points.
To (re)consult market news
Stock market indices at closing
In Toronto, the S&P/TSX closed up 110.17 points (+0.54%) at 20,564.49 points.
In New York, the S&P 500 ended up 54.27 points (+1.33%) at 4,146.22 points.
The Nasdaq collected 236.93 points (+1.99%) to 12,166.27 points.
The DOW rose 383.19 points (+1.14%) to 34,029.69 points.
The loon gained US$0.0060 (+0.8010%) to US$0.7500.
The oil closed down US$0.89 (-1.07%) at US$82.37.
L’or rose US$30.00 (+1.48%) to US$2,054.90.
The bitcoin gained US$345.92 (+1.15%) to US$30,305.66.
The context
On Thursday the US Department of Labor released the PPI producer price index for March which showed wholesale prices fell 0.5% on the month.
This is their largest decline in three years, mainly due to a decline in energy prices. Analysts were expecting stable prices.
Over twelve months, wholesale prices only rose by 2.7% once morest 4.9% in February. These figures come following the news that the consumer price index (CPI) has slowed over a year to 5% once morest 6% in February.
“We are certainly witnessing a surge of optimism that the end is near of the cycle of interest rate hikes by the Fed”, the American central bank, Karl Haeling of LBBW told AFP.
“Inflation is on the downward slope,” he added.
The prospect that the central bank may soon pause its rate hikes also stems from the first signs of a slowdown in US activity. Under these conditions “bad news is good for equities,” commented Edward Moya, analyst for Oanda.
First, there were fears of a “mild” recession following the March mini bank panic, expressed by Fed economists on Wednesday in the minutes of the latest monetary policy.
And then on Thursday, the Labor Department released weekly jobless claims up 11,000 to 239,000.
“With soaring layoffs, the highest for a first quarter since 2005 […]we can expect job creation to fall to zero by the middle of the year,” said Kieran Clancy, economist for Pantheon Macroeconomics.
After the macroeconomic data, investors will focus from Friday on the results season with the big banks which will be observed under the magnifying glass following the banking difficulties that occurred last month.
“If the deposits in the banks show an erosion or if they communicate badly on the subject, it might hit hard,” warned Karl Haeling.
On the stock market, a large majority of Dow Jones stocks rose, Visa (V, +2.05% to US$232.69) at McDonald’s (MCD, +1.27% to US$289.07) via Disney (DIS, 2.86% to US$100.84).
Nine of the eleven S&P sectors finished in the green, with the exception of real estate and utilities.
Delta Air Lines (DAL) fell 1.10% to US$33.37 following reporting another loss in the first quarter. But the airline confirmed its targets for the year.
Tech mega-caps carried the Nasdaq as did the online retail giant Amazon (AMZN, +4.67% to US$102.40) as retail sales figures for March in the United States are expected on Friday.
Apple (AAPL) gained 3.41% to US$165.56, Tesla (TSLA) 2,97% à 185,90$ US.
The motorcycle manufacturer Harley Davidson (HOG) which at the start of the session fell 4.36%, lost only 1.74% to US$36.71 following the announced departure of its financial director hired by the toy manufacturer Hasbro (HAS, +2,61% à 52,64$ US).
Tupperware (TUP), which had collapsed 50% on Monday, recovered 18.18% to US$1.56. The legendary storage box brand has warned it “has significant doubts regarding its ability to continue in business” as its plastic boxes fall out of favor with consumers.
