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MARKET REVIEW. Still keeping an eye on the rise in bond rates, the New York Stock Exchange closed lower on Wednesday at the end of a checkered session, with a new plunge of the Nasdaq.
The Toronto Stock Exchange closed lower on Wednesday, dragged down by losses in the information technology and materials sectors, which suffered from higher bond yields.
The clues
In Toronto, the S&P/TSX lost 100 points, or 0.55%, to 18,320 points.
In New York, the S&P 500 decreased 50 points, or 1.31%, to 3,819 points.
The Dow Jones fell 121 points, or 0.39%, to 31,270 points.
The Nasdaq fell 382 points, or 2.93%, to 12,673 points.
The Canadian dollar lost 0.10% to US $ 0.7897.
Oil rose US $ 1.24, or 2.08%, to US $ 60.99.
Gold fell US $ 25, or 1.44%, to US $ 1,708.60.
The context
“Once again investors have dwelt on rising bond yields,” said analysts at Wells Fargo.
Suddenly, the securities of the technological sector, said to be growth because these groups are greedy in investments to grow, suffered from the prospect of a more expensive rent of money.
Bond yields on 10-year Treasuries rebounded above 1.47% after closing at 1.39% the day before.
“The money these companies are going to make is less valuable as rates rise. This is the basic theory: when rates go up, the markets go down, ”said Gregori Volokhine, fund manager at Meeschaert Financial Services.
“But rates are also rising in anticipation of better days”, from where, according to him, the reluctance of the markets which had started the week on a huge rebound before falling back severely on Tuesday.
On Wednesday, the Stock Exchange also digested a report on employment in the private sector softer than expected, before the official unemployment figures on Friday.
The ADP survey on the private sector showed a sharp slowdown in job creation in February, to 117,000 against 180,000 expected.
Very strong economy to come
Still, analysts believe the official labor market report on Friday will be much more optimistic. They predict 200,000 new jobs in February and an unemployment rate stable at 6.3%.
On the good news side, which portends strong growth in the second half of the year, President Joe Biden assured that at the end of May there would be enough vaccines for all adults in the United States. The previous deadline was at the end of July. Pfizer jumped 2.63%, Johnson & Johnson dropped 1.76%.
In addition, the massive economic support plan of 1.9 trillion dollars is close to being adopted, although it may come out at a lower amount.
This made Jamie Dimon, the CEO of the bank JPMorgan Chase, say on CBS, that with the support plan, it was necessary to foresee “a very strong economy at the end of the year and at the beginning of next year. “.
While the financial, energy and industrial sectors have performed well, technology stocks have faltered, as Apple (-2,45 %), Facebook (-1,39 %), Microsoft (-2.70%) or Square (-7,14 %).
Very visited, the action of the application Zoom lost 8.37% after already -9% the day before, when it had announced a turnover multiplied by three in 2020.
The title Lift climbed 8.24% after the chauffeur-driven car rental service posted its best shopping week since the start of the pandemic at the end of February.
The action of the online mortgage lender Rocket Companies, prized by amateur brokers on internet forums, continued to be volatile, falling over 32% after closing up 71% the day before.
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