2024-10-22 20:06:00
The New York Stock Exchange ended in disarray on Tuesday, still hesitant after a clear acceleration in bond rates, even if the market mood remains positive.
The Dow Jones (-0.02%) and the broader S&P 500 index (-0.05%) finished close to balance, while the Nasdaq index gained 0.18%.
“There is a tension between, on the one hand, the fact that when rates rise, it makes bonds more attractive and, on the other, the signal that this sends of an economy that is doing better than expected “, commented Tom Cahill of Ventura Wealth Management.
The yield on 10-year US government bonds rose to 4.22%, a first in almost three months.
This tension is due to the firmness of several members of the American central bank (Fed), as well as the health of the American economy.
Bond yields move in the opposite direction of their prices.
It is also explained by the approach of the presidential election on November 5, with many operators seeing Donald Trump winning.
However, the Republican candidate’s program includes measures which, according to several independent assessments, should further inflate the budget deficit.
This perspective suggests that the United States will have to pay more to investors who buy their debt, which will push bond rates higher.
For Tom Cahill, corporate results play little role, for the moment, in the direction of the New York market.
“It is still too early to form an opinion,” said the analyst. “We still have to wait two weeks.”
“The market is brooding and not doing much,” observed Art Hogan of B. Riley Wealth Management. “He’s taking a break.”
On the stock market, General Motors (+9.81%) was acclaimed after reporting better results than projected by analysts and raising its annual targets.
The manufacturer has particularly made sparks on pick-ups and large SUVs, the models which have the highest margins.
Although having also exceeded expectations in terms of profit and raised its annual forecasts, the defense group Lockheed Martin was penalized (-6.81%) for having missed the turnover march.
The Bethesda (Maryland) company suffered from not having concluded an agreement with the American government in the third quarter relating to the purchase of F-35 fighters, with discussions continuing without a specific deadline.
GE Aerospace (-9.05%) also surpassed Wall Street projections and raised its targets, but operators punished it due to persistent problems in its supply chain.
The tobacco company Philip Morris International jumped (+10.47%) after reporting better than expected results, helped by its refocusing on Zyn nicotine sachets and heated tobacco products.
The Walgreens Boots Alliance group (-6.89%) suffered from the announcement by Amazon, which plans to open new pharmacies in the United States, entering into head-on competition with traditional networks.
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