(New York) The New York Stock Exchange paradoxically praised the disappointing US employment figures on Friday, as they ward off the prospect of an interest rate hike, which allowed the Dow Jones and S&P 500 to reach new records.
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According to final results on Wall Street, the Dow Jones Index of blue chip stocks climbed 0.66% to 34,777.76 points, hitting a new high on the 3rde of the week.
Record also for the S&P 500 index, more representative of the American market, which gained 0.74% to 4232.60 points. The tech-heavy NASDAQ, which suffered during the week from investor rotation to traditional economy stocks, rose solidly 0.88% to 13,752.24 points.
Toronto has a record too
The Toronto Stock Exchange posted its tenth consecutive weekly gain on Friday, even reaching an all-time high, as the most recent weakness in the labor market data reinforced the idea of maintaining the flexibility of monetary policy in the country.
Toronto’s S & P / TSX Composite Index gained 181.76 points on Friday to end the day at 19,472.74 points.
In the currency market, the Canadian dollar traded at an average of 82.26 cents US, up from 81.97 cents US the previous day.
A report taken with a grain of salt
“The stock market responded positively to this US employment report” for April, however disappointing since only 266,000 jobs were created while analysts expected more than a million, said Karl Haeling of LBBW.
“This report appeared too weak, investors do not believe that these figures really reflect the state of the economy,” the analyst told AFP.
For JJ Kinahan, chief market strategist for TD Ameritrade, “it’s very difficult for analysts to estimate such a figure, because states are all reopening at very different rates,” he said. “Let’s wait for next month’s report,” he said.
But above all, these weak job creations and a slight increase in the unemployment rate to 6.1% have removed the specter of overheating, inflation and therefore a tightening of the monetary policy of the Central Bank ( Fed).
Interest rates close to zero, as they have been since the outbreak of the COVID-19 epidemic in the United States just over a year ago, favor Wall Street investors who find more profits in stocks than bonds.
“For the stock market, these figures undoubtedly delay the reduction of the Fed’s asset purchases”, which it has maintained since the health crisis to support the economy, confirms Karl Haeling. “This conversation is now off topic,” also opined Art Hogan of National Securities.
“It also gives President Joe Biden a better chance of pushing through a new budget spending plan,” LBBW’s Mr. Haeling further suggested.
Bond rates on 10-year Treasury bills, which had tumbled four points to 1.5276% when the Labor Department figures were announced, finally rose to 1.5753% as several bond issues are scheduled for the week next.
The dollar sank to a two-month low against the euro at 1.2164 dollars per euro (-0.82% at 4:30 p.m.).
Among the actions of the day, the manufacturers of vaccines against COVID-19 have clearly regained color after a very negative reaction the two previous sessions on the idea that patents could be lifted to promote wide global distribution of the precious vaccines. As this project encountered divergent opinions within Europe, Novavax took over more than 2%, Moderna + 1.65%, Pfizer + 0.92% and its German partner BioNTech + 9.35%.
The digital payment group Square, whose turnover has tripled to 1is quarter, boosted by bitcoin sales, climbed 4.19%. Among the stocks in the traditional economy that are benefiting from the reopening of the economy, American Airlines and Delta gained more than 2% as well as Boeing, a major member of the Dow Jones.
With The Canadian Press
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