MARKET OVERVIEW. The New York Stock Exchange ended Thursday significantly higher, optimistic on the Federal Reserve’s (Fed) ability to maneuver a soft landing despite a second-quarter contraction in the US economy.
For its part, the Toronto Stock Exchange gained more than 200 points.
Consult market news (again).
Stock market indices at close of trading
In Toronto, the S&P/TSX rose by 202.15 points (+1.05%) to 19,456.71 points.
In New York, the S&P500 rose by 48.82 points (+1.21%) to 4,072.43 points.
the Nasdaq rose by 130.17 points (+1.08%) to 12,162.59 points.
the DOW increased by 332.04 points (+1.03%) to 32,529.63 points.
the loons rose by US$0.0009 (+0.1171%) to US$0.7806.
the oil rose $0.04 (+0.04%) to $97.30.
L’gold ended at $35.50 (+2.04%) at $1,773.00.
the Bitcoin rose $1,231.81 (+5.42%) to $23,955.56.
“We are seeing a very clear transition between a market that has always reacted negatively to all information and a market that is turning positive,” affirmed Adam Sarhan of 50 Park Investment.
Companies “are releasing results that aren’t great, but the expectations are so bad that the market’s reaction in terms of negativity is moderate,” the analyst told AFP.
“When we add to that the fact that the Fed didn’t hike rates by 1 percentage point but only by 75 points, that’s still a positive trait for the market,” he added, stressing that Wall Street is always was still concerned that the central bank would be more aggressive.
Still, the United States’ gross domestic product (GDP) shrank 0.9% year-on-year in the second quarter, worse than expected (+0.3%), adding to the 1-month contraction already recorded in January-March .6% added.
But the stock market reacted optimistically: “There is a tendency to believe that the recession will be moderate,” Cresset Management’s Jack Albin also suggested.
“Looks like the Fed might find an easy way out of its fight against inflation without doing too much damage to the economy,” Albin said.
“But I’m still waiting for the next inflation numbers before declaring victory,” the analyst added.
Hope for a mild recession
Adam Sarhan shared this view: “Yes we are in a recession but it could be very mild. And a mild recession is the best possible scenario.”
“It looks like we’re heading for a soft landing,” he said.
For its part, the Biden administration on Thursday set about demonstrating that the American economy remained “resilient” and minimized the definition of a recession.
Janet Yellen, the Treasury Secretary, instead described “an economy in transition towards more stable and sustainable growth”.
In the bond market, 10-year Treasury bill yields fell moderately to 2.66%, but their lowest level in four months.
is popular Amazon (AMZN, $122.28) which, like the Nasdaq, closed at +1.08%, took off like a rocket (+11.83%) after the close of trading with the announcement of its results.
The #1 online retailer posted second-quarter sales of $121 billion, up 7%, even as the group posted a $2 billion loss related to a painful investment in the electric-car maker Rivian (RIVN, $33.84, +5.73%).
Apple (AAPL, $157.35, +0.36%) also shone in electronic trading after the stock exchange closed (+2.45%), in the wake of the profit, however, almost 11% in the red, but with iPhone sales that were above expectations.
Rarely falling below big tech caps, Meta (Facebook, META, $160.72) suffered a setback (-5.22%) after announcing a drop in sales for the first time in its history, coupled with competition from TikTok and advertiser spending cuts.
The American competition authority FTC has also rejected Mark Zuckerberg’s group, which prevents them from buying a specialist in virtual reality, Within Unlimited, for reasons of market dominance.
The air Line Spirit (SAVE, $25.66, +5.60%)eventually acquired through jet blue (JBLU, $8.37, -0.36%) for $3.8 billion, meanwhile rose Border (ULCC, $13.58, +20.50%)who threw in the towel was in great demand.
The semiconductor giant Intel (INTC, $39.71) which ended down 1.17% fell 10.10% at the close following the quarterly results, marking a disappointing outlook.
Like the other big players in the industry Nvidia (NVDA, $179.84, +1.09%) Where AMD (AMD, $91.67, +2.06%) on the other hand, they have been doing well, especially after the US Congress passed legislation to support the sector.