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MARKET REVIEW. The Toronto Stock Exchange retreated late Tuesday morning, while the major US indices also lost their feathers.
The New York Stock Exchange started the month of August essentially in the red on Tuesday at the start of a busy session in corporate results, some of which were mixed.
To (re)consult market news
Stock market indices at noon
In Toronto, the S&P/TSX fell -65.24 points (-0.32%) to 20,561.40 points.
In New York, the S&P 500 fell -65.24 points (-0.32%) to 20,561.40 points.
The Nasdaq posted a decline of -65.24 points (-0.32%) to 20,561.40 points.
The DOW fell -65.24 points (-0.32%) to 20,561.40 points.
The loon was down -US$65.24 (-0.32%) at US$20,561.40.
The oil fell -US$63.56 (-0.31%) to US$20,563.08.
L’or fell -US$63.56 (-0.31%) to US$20,563.08.
The bitcoin fell -US$63.56 (-0.31%) to US$20,563.08.
Context
The indices ended July with a monthly increase of more than 3%, the fifth positive month in a row for the broader S&P 500 index and the Nasdaq.
But on Tuesday, a rise in bond yields chilled investors. Rates on ten-year Treasury bills climbed above 4% from 3.95% the previous day.
“It looks like the stock market is oversold in the short term and is set for a pullback,” said Patrick O’Hare of Briefing.com.
“Another downside factor is the behavior of the ten-year note whose yield has rallied above 4%,” he added, noting that this caused “anxiety over high valuations .
Investors are also cautious in their positions this week awaiting major indicators on Friday, those of job creation, the unemployment rate and the increase in wages in July in the United States.
Analysts predict a still tight labor market with 200,000 job creations in July against 209,000 in June.
The week is also very busy in corporate results, with a third of S&P 500 companies publishing their accounts during these five sessions, noted Art Hogan of B. Riley Wealth Management.
On the stock market, the title of Pfizer Laboratories advanced by 0.49% while its turnover fell more than expected in the second quarter due to the drop in the need for vaccines and treatments against COVID-19.
The pharmaceutical giant has also lowered its full-year revenue forecast and now expects a tighter range, between 67 and 70 billion US dollars (B$US), against 67 to 71 previously.
The giant of construction machinery Caterpillar (CAT) soared 7.10%, which supported the Dow Jones in the green. The group announced a virtual doubling of its net profit, benefiting from an increase in prices and volumes which led to a jump of 22 in turnover.
But Caterpillar, which is a group considered a barometer of the health of the global economy, warned that its sales and operating margins were down for the third quarter.
On the Nasdaq, Uber (UBER) plunged almost 5% despite a stronger than expected profit in the second quarter for the platform for booking vehicles with driver and meal delivery.
But this profit of 394 million US dollars (M$US) against a loss of 713 M$US a year before is mainly due to the accounting appreciation of its participations in start-ups and less to its own activity.
Revenue fell short of analysts’ forecasts at US$9.2 billion.
After the closing, the coffee chain Starbucks (SBUX, -0.21%) will publish its results. The big day will be for Thursday with Apple (AAPL, -0,44%) et Amazon (AMZN, -1,44%) notably.
In terms of macro-economic data, the ISM manufacturing activity index in the United States for July disappointed. At 46.4% against 46% the month before, this certainly represents a weaker contraction than in June, but it is less than expected when analysts were betting on 46.9%.
“The recent rise in yields on ten-year Treasury bills above 4%” which influences the cost of medium and long-term loans, “suggests that a sustained rebound in the growth of industrial activity is unlikely likely,” said Andrew Hunter of Capital Economics.
2023-08-01 18:19:29
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