It was the European markets that set the tone on Wall Street, reversing the trend just hours before the New York Stock Exchange opened. (Photo: Spencer Platt for Getty Images)
MARKET OVERVIEW. The Toronto Stock Exchange closed down nearly 200 points Tuesday as crude oil prices fell and losses in the energy and base metals sectors deepened.
The New York Stock Exchange ended in a mixed order, a possible recession scenario sending many stocks reeling while the technology sector benefited from a fall in bond yields.
Consult market news (again).
Stock market indices at close of trading
In Toronto, the S&P/TSX closed 194.70 points (-1.02%) at 18,834.16 points.
In New York, the S&P500 rose by 6.06 points (+0.16%) to 3,831.39 points.
the Nasdaq rose by 194.39 points (+1.75%) to 11,322.24 points.
the DOW fell 129.44 points (-0.42%) to 30,967.82 points.
the loons lost $0.0100 (-1.2875%) to $0.7678.
the oil declined $8.88 (-8.19%) to $99.55.
L’gold down $37.70 (-2.09%) to $1,763.80.
the Bitcoin rose $638.40 (+3.23%) to $20,412.69.
The session had started in the red after three days of a long bank holiday weekend in the United States, reflecting the tone of European stock markets.
But as the day progressed, indices rallied, particularly the Nasdaq.
“Buyers came back” during the session, analysts at Briefing.com noted in a note, “when they appeared to have left to stay on vacation.”
The other driver of this reversal was the escapade of technology and growth stocks, which benefited from the easing of bond rates. The 10-year government bond yield fell sharply to 2.83% from 2.88% on Friday.
“One of the best proven correlations is for the Nasdaq to receive support when interest rates fall,” said Quincy Krosby of LPL Financial.
The fall in interest rates reflects expectations of less hawkish monetary policy than expected, which would anticipate less tight credit conditions in the coming years, a key factor for so-called growth stocks, which need to borrow to fund their development.
PayPal (PYPL, $74.40, +4.20%, +3.00 points), Airbnb (ABNB, $95.94, +4.96%, +4.53 points) Where Uber (UBER, $22.52, +5.53%, +1.18 points) have stuck their noses out of the window with this, as have the rating giants, almost all associated with the tech industry,Amazon (AMZN, $113.50, +3.60%, +3.94 points) at Alphabet (GOOGL, $2265.26, +4.16%, +90.51 points)pass Meta (META, $168.19, +5.10%, +8.16 points).
“Looking for growth [sur le marché action] where to find it,” said Quincy Krosby, “and many of these stocks have been hit so hard by the market that they’re becoming attractive today.”
The operation eventually evolved into a bargain hunt that dragged on Tesla (TSLA, $699.20, +2.55%, +17.41 points)which had just published disappointing quarterly figures on Saturday.
Ironically, in a New York square that is becoming more and more convinced of the recession hypothesis, the so-called defensive values, i.e. less sensitive to the economy, were not able to assert themselves on Tuesday.
The cable operator Comcast (CMCSA, $39.83, -0.47%, -0.19 points)the food group Kraft Heinz (KHC, $38.12, -1.35%, -0.52 points) and Procter & Gamble (PG, $144.70, -0.97%, -1.41 points) so it all ended below.
Another troubled sector, energy, suffered from the collapse in oil and commodity prices in general.
The oil companies Marathon Oil (MRO, $21.13, -6.30%, -1.42 points) and Conoco Phillips (COP, $84.64, -6.93%, -6.30 points)but also the steel manufacturer US Steel (X, $17.02, -4.97%, -0.89 points)Mining Freeport McMoRan (FCX, $27.26, -6.55%, -1.91 points) or the brokerage of agricultural raw materials Archer-Daniels-Midland (ADM, $72.38, -5.26%, -4.02 points) have all bitten the dust.
The fall in interest rates undermined the financial sector as the prospect of less stringent Federal Reserve (Fed) tightening would strip banks of some of their margins without preventing a credit crunch.
Citigroup (C, $46.61, -0.55%, -0.26 points) and Bank of America (BAC, $31.24, -1.01%, -0.32 points) lost ground on Tuesday.
In this bleak context, anything fueling the scenario of a sharp economic slowdown or even a recession can act as a catalyst for equity markets by staving off the threat of an overly stubborn Fed.
In the case of the US jobs report, the week’s most anticipated macroeconomic indicator, due out on Friday, Quincy Krosby said “bad news can become good news.” “Lower job creation and a slowdown in wage growth would be seen as positive for the market.”
However, fears of recession continue to dominate the New York market, whose mood has been very changeable for several weeks. For now, “Wall Street remains a market for traders,” says the analyst, who is at the mercy of headlines or technical moves.