2024-08-30 20:06:30
The New York Stock Exchange closed higher on Friday, pleased by reassuring inflation news and a string of good earnings.
The Dow (+0.55%) took the opportunity to set its fourth new record of the week, while the Nasdaq and the broader S&P 500 rose 1.13% and 1.01%, respectively.
The New York market experienced typical month-end volatility, opening in the green, then entering the red before rising in the final minutes.
“Volume was lower today, which makes sense ahead of a three-day weekend, but good releases and positive indicators encouraged a bullish bias,” commented Patrick O’Hare of Briefing.
Wall Street will be closed on Monday for Labor Day.
The personal consumption expenditures (PCE) price index, which is considered the most relevant by the US central bank (Fed), rose 2.5% in July over the past year, unchanged from June and in line with expectations.
Excluding energy and food, the figure was 2.6%, lower than economists’ forecast (2.7%).
“The Fed’s preferred inflation measure is close enough to 2% (its long-term goal) to start cutting rates,” said Bill Adams of Cointelegraph.
The picture is almost idyllic, as consumption growth, meanwhile, exceeded that of June.
“This is not a recession,” Bill Adams concluded.
While they do see the Fed taking planned action next month, on the other hand, investors no longer believe in the assumption of a half-basis point rate cut and are more inclined to a quarter-basis point cut.
The development gave the dollar a small boost and caused bond yields to tighten. The 10-year U.S. government bond yield was 3.91%, compared with 3.86% at the previous close.
In addition to the macroeconomic news, Wall Street also welcomed several corporate earnings.
Among them, computer chip designer Marvell Technology (+9.16%) is less well-known than the big names in the semiconductor sector: its performance exceeded market forecasts thanks to demand for artificial intelligence (AI).
Dell (+4.33%) also reported figures that topped analysts’ forecasts and raised its annual targets.
Originally known for its personal computers, the Round Rock (Texas) group has transformed itself in recent years and is now a major supplier of AI-calibrated servers.
Another good news is that sportswear brand Lululemon reported better-than-expected net profit and stronger profit margin (+0.18%).
In the market, except for Nvidia (+1.51%) and Marvell which are rebounding, the stars in the semiconductor industry are all doing well, whether it is Broadcom (+3.75%), AMD (+2.11%) or Qualcomm (+3.43%).
Intel performed even better (+9.49%), stimulated by information from Bloomberg, according to which the Santa Clara Group is considering splitting its microprocessor design activities and manufacturing business.
After falling sharply in early August due to sharp fluctuations in the yen, the New York market traded well and recovered its losses in late August.
Patrick O’Hare said that while September is traditionally a bad month for stocks, the momentum is likely to continue.
“Right now, the market is taking it meeting after meeting and it sees the economy continuing to grow, corporate earnings remaining solid and interest rates are going to come down,” he believes.
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