2023-05-09 20:01:00
The New York Stock Exchange ended Tuesday in a slight decline on the eve of new data on US inflation and before negotiations on the debt ceiling of the United States.
The Dow Jones index fell 0.17% to 33,561.81 points, the technology-dominated Nasdaq fell 0.63% to 12,179.55 points. The broader S&P 500 index dropped 0.46% to 4,119.17 points.
The market is adopting “a wait-and-see attitude” ahead of Wednesday’s release of the consumer price index (CPI) for April, commented Steve Sosnick of Interactive Brokers.
“Given the expectations” which are for an increase of 0.4% once more in the month of April alone, “there is room to be optimistic and see an inflation figure a little better than that”, hoped the analyst.
John Williams, President of the New York Fed, did not exclude for his part that an additional increase in rates is necessary given the high inflation. “We didn’t say we were done raising rates,” he warned, stressing that the Fed must “keep a restrictive policy in place for some time.”
On the political-economic front, the showdown over the US debt ceiling was creating some anxiety among investors, but less than the media attention would suggest.
Congress is currently blocking the borrowing capacity of the United States, demanding drastic spending cuts while President Joe Biden, so far, has refused to negotiate.
The two sides were to meet following market close for talks at the White House. Without an agreement or moratorium, a US default is possible following June 1, which would cause financial chaos.
This oft-repeated threat throughout recent history has never materialized.
The debt ceiling: a film already seen?
“Of course, the debt ceiling is a concern, but for investors, we’ve seen this movie play before. In general, it ends well,” said Steve Sosnick.
“If investors were really worried, the VIX index (which measures market volatility) would be well above 17.5,” said the analyst.
On the bond market, ten-year rates changed little at 3.52% once morest 3.50% the day before.
On the stock market, regional banks, still under the worried eye of traders, oscillated between green and red: Pacwest ended in positive territory (+2.35%) but Western Alliance remained in the red (-1 ,35%).
“The market is not yet ready to give the green light” for the banking sector following several bankruptcies and a trend of deposit flight, noted the Interactive Brokers specialist.
Boeing gained 2.33% to 201.86 dollars following earning an order for 300 new Boeing 737-MAX-10s, for a list price of more than 40 billion dollars from the Irish company Ryan Air.
The media group of Rupert Murdoch Fox Corporation, which recently had to pay 787 million dollars to settle a lawsuit for false information, finally yielded 1.49%. However, its quarterly results were better than expected, with revenue climbing 18% to $4.08 billion.
Data analytics firm Palantir soared 23.26% to $9.54 following announcing better-than-expected quarterly results as management reported “unprecedented demand” for its insights which should benefit from the artificial intelligence support.
Electric vehicle maker Lucid lost 5.58% as sales fell from the previous quarter.
Airbnb posted 20% revenue growth in the first quarter, better than expected, but rates its second-quarter guidance in a slightly less optimistic range than analysts. The action of the tourist furnished rental company, which had jumped on Monday, yielded 9.70% in electronic trading following the close.
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