New York (AFP) – The New York Stock Exchange moved in random order on Friday, digesting conflicting indicators, which fuel the scenario of continued monetary tightening, but ready for a year-end rebound.
At around 15:20 GMT, the Dow Jones gained 0.13%, the Nasdaq index lost 0.26% and the broader S&P 500 index gained 0.11%. Early in the session, the S&P 500 fell to its lowest level in a month and a half.
Investors were cool with the release of the PCE price index, the most followed by the US central bank (Fed), which showed a 5.5% yoy gain in November, versus 6.1% for the month previous one.
But “the market was hoping for a slightly lower figure” for core inflation (excluding food and energy), which came in at 4.7% versus 4.6% expected, said Quincy Krosby, of LPL Financial.
“Inflation remains very high, well above the level the Fed could accept,” Oxford Economics said in a statement.
In fact, the hypothesis of a reference rate rising above 5% next year, largely ruled out a week ago, is making a comeback, which is unfavorable for the equity markets.
In the bond market, the yield on 10-year US government bonds fell to 3.73% from 3.67% the day before.
The PCE survey also showed that consumption increased by 0.1% over one month in November, less than expected by economists (+0.2%). A break, according to Oxford Economics, explained by the sharp rise in interest rates and the still high inflation rate.
“A consumption that slows down is bad for stock markets, because it implies a deterioration in corporate results,” said Chris Zaccarelli, of the Independent Advisor Alliance.
Nonetheless, the indices rose again with the arrival of another indicator, the consumer confidence index, published by the University of Michigan, which reached 59.7 points in December, better than economists’ expectations (59, 1).
Some on Wall Street still believe in the possibility of a final year-end bounce, despite the prevailing gloom.
“The further the market falls, the greater the probability of a rebound becomes,” recalls Quincy Krosby. With Monday being a public holiday in the US, there will be only four trading days left to give the indices a bit of a boost.
Listed, Tesla was unable to curb its decline (-0.37% to $124.88), which began several weeks ago, despite the statements of Elon Musk, the boss and reference shareholder of the electric vehicle manufacturer, who pledged on Thursday during a forum organized on Twitter , not to sell any Tesla stock in 2023 “and probably not even the following year”.
A growing number of analysts warn that the difficulties are just beginning for Tesla, which is facing a slowdown in demand, while Elon Musk “fell asleep at the wheel”, much taken by the Twitter file, “so investors need a leader that can weather the storm,” said Dan Ives of Wedbush Securities.
Targeted in a murky backdrop, raising growth fears, tech stocks continued to suffer, be they Apple (-0.64%) or Microsoft (-0.36%).
Conversely, the Dow Jones was supported by so-called defensive stocks, i.e. considered less sensitive to the economic situation, which did well, such as Coca-Cola (+0.43%), the Merck laboratory (+0.58%) or the industrial conglomerate Honeywell (+0.41%).
Airlines continued to feel the effects of the storm that has begun to hit the United States and is expected to last until the Christmas weekend. Several hundred flights were canceled again on Friday due to weather conditions.
Thus Delta Air Lines (-0.71%) or American Airlines (-0.81%) were sanctioned.
© 2022 AFP
