Reassured by both the Fed and Evergrande, the New York Stock Exchange was on the rise

The New York Stock Exchange opened higher Thursday, rather confident in the resolution of the crisis that the Chinese real estate developer Evergrande is going through and after having quickly digested the announcements of the American Central Bank (Fed).

At around 2.15pm GMT, the Dow Jones gained 1.37% to 34,729.22 points, the Nasdaq high-tech index, 0.99% to 15,043.67 points and the S&P 500 widening index, 1.19% to 4,447 , 95 points.

According to Karl Haeling of LBBW bank, the market is being boosted by the latest developments in the Evergrande crisis.

The Wall Street Journal however reported Thursday that the Chinese authorities had asked local communities to prepare for a possible dismantling of the real estate giant. The promoter will “do everything possible” to honor its commitments, its president, Xu Jiayin, told the Chinese official press.

“Everyone knows Evergrande is over, one way or another”, commented Karl Haeling, but reigns nonetheless “A growing optimist that China will not let it collapse by selling its assets out of control.”

Illustration of this sentiment, the price of bonds issued by Evergrande in dollars, which had lost more than three-quarters of their value, rebounded Thursday. As for the announcements of the Fed, Wednesday, they were generally received with serenity by the investors, even if the general tone was more directed towards a monetary tightening than during the last meetings.

“The market’s initial impression of this impending move (in monetary policy) is that it suits them.”, wrote Patrick O’Hare, in a note. In the short term, the Fed remains exceptionally accommodating, recalled Karl Haeling.

“There is no consensus in 2022 or 2023”

Moreover, the fact that half of the members of the Fed’s monetary committee are counting on a first hike in key rates from 2022 does not mean that this hike has been taken for granted. “There is no consensus in 2022 or 2023”, insisted Chris Low, chief economist of broker FHN Financial, in a note.

The Fed’s announcements incorporated by the operators, “you might see a return from some buyers,” who had stepped aside before the meeting to avoid any uncertainty, said Karl Haeling.

In the bond market, investors were gradually integrating the scenario of closer monetary tightening. The 10-year US government bond rate rose to 1.36% from 1.31% the day before.

On Wall Street, the specialist in IT services dedicated to customer relations Salesforce benefited (+ 4.78% to 271.57 dollars) from an increase in its 2021/22 turnover forecast (from February to January). The group also gave a first estimate of its revenues for the following fiscal year (2022/23), which would represent an annual increase of more than 20%.

Also at the party, the restaurant group Darden benefited from the publication of a net profit above expectations (+ 8.30% to 162.79 dollars). In the quarter from June to August, the operator of the Olive Garden chain did better than two years earlier, before the start of the pandemic.

Carnival accelerated (+ 4% to 24.56 dollars) after the announcement that the cruise line planned to have returned to service more than 50% of its fleet by October. Its competitors Norwegian Cruise Line (+ 4.40% to 27.16 dollars) and Royal Caribbean (+ 3.09% to 87.97 dollars) also benefited from this communication.

Helped by the prospect of a possible rate hike anticipated by the Fed, bank stocks started off the session with a bang, like Bank of America (+ 2.77%), JPMorgan Chase (+ 2.39%) or Citigroup (2.86%).

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