MARKET OVERVIEW. The New York Stock Exchange ended Wednesday in the red, marking a pause after several sessions of back-to-back gains driven by mixed company results and a mixed message from the US Federal Reserve (Fed).
Consult market news (again).
Stock market indices at close of trading
In Toronto, the S&P/TSX closed up 88.53 points (-0.44%) at 20,181.44 points.
In New York, the S&P500 closed up 31.16 points (-0.72%) at 4,274.04 points.
the Nasdaq closed 164.43 points (-1.25%) at 12,938.12 points.
the DOW closed 171.69 points (-0.50%) at 33,980.32 points.
the loons ended down $0.0039 (-0.5058%) at $0.7746.
the oil rose $1.20 (+1.39%) to $87.73.
gold fell $10.50 (-0.59%) to $1,779.20.
the Bitcoin fell $580.19 (-2.42%) to $23,363.12.
“The market had been going too fast for the past few weeks and we expected it to try to digest its gains from the past few sessions,” commented Quincy Krosby. With that, the Dow Jones ended five consecutive bull sessions.
Investors were also encouraged to take profits by the exit from Target (-2.69% to $175.34), whose pre-market profit was eaten up by rebates (-89%) to reduce inventories and rising transport costs.
Wall Street saw the release of the minutes (the Minutes) of the US Federal Reserve Board (Fed) meeting earlier in the afternoon as likely to put some momentum back into the market, but it didn’t produce just a modest, short-lived rebound.
For Tower Bridge Advisors’ Maris Ogg, those minutes haven’t ended the debate currently raging in the New York market over the possibility of an imminent Fed change of course.
“You could reason whatever you wanted,” she said, with monetary policy committee members citing a medium-term slowdown in their monetary tightening but saying they remain committed to raising rates in the near term.
Oxford Economics’ Kathy Bostjancic noted a “change in tone” from the Fed, which is no longer just concerned about inflation, but also about the impact of its monetary policy on the American economy, which is slowing and therefore more cautious.
After the minutes were released, operators overwhelmingly backed the acceptance of a half-point increase at the September 21-22 meeting, when they had expected 0.75 points a year ago.
For Maris Ogg, the job market is so tight that “you won’t see a spike in unemployment similar to previous cycles of monetary tightening,” giving “more room for the Fed to hike rates.”
The indices also reacted only marginally to the publication of retail sales in the USA in July, which were stable compared to June, while economists had expected a slight increase (+0.1%).
It was also time for profit-taking on the bond market. The yield on 10-year US government bonds, which is moving in the opposite direction to its price, rose above 2.90% for the first time in a month after 2.82% on the previous day.
This rise in bond yields played against technology and growth stocks, which are sensitive to the cost of the money they need to fund their development.
They have also been the first target of profit-taking that has fueled the stock market’s recovery since mid-June.
Amazon (AMZN) (-1.85%), Letters (GOOG) (-1.79%), Meta (FB) (-2.57%) and Netflix (NFLX) (-1.85%) all ended clearly in the red, but the latter has remained up more than 46% since June 14th.
Apple (AAPL) +0.88% to $174.55 went against the tide, buoyed by news from the Nikkei Group that Apple plans to move some of its manufacturing to Vietnam, which would reduce its reliance on China.
DIY shield Lowes (LOW), +0.58% to $215.37, despite a slight decline in sales (-0.3% YoY), sailed better than Target in choppy retail waters and held its margin to the satisfaction of the market with a net profit above expectations.
The action of the English professional football club Manchester United (manu) +3.44% to $13.22, listed in New York, benefited from the attention generated by a tweet by Elon Musk, later described as a “joke” by its author, announcing that he was the crew would buy.
Ineos Group owner Jim Ratcliffe threw a coin into the machine as his spokesman told the Times of London on Wednesday his desire to buy the legendary club, which is currently struggling in sporting difficulties.