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Wall Street remains green despite inflation and the Fed

Wall Street remains green despite inflation and the Fed
Wall Street remains green despite inflation and the Fed

The New York Stock Exchange ended overall in the green on Wednesday thanks to strong first quarterly corporate results and despite sustained US inflation and the Fed’s plans to reduce monetary support.

According to final results on Wall Street, the Dow Jones index concluded in equilibrium at 34,377.81 points.

The technology-heavy Nasdaq gained 0.73% to 14,571.63 points, while the S&P 500 advanced 0.30% to 4,363.80 points.

“The market has remained broadly higher, despite the bad news of inflation and the minutes from the Fed which indicated a likely decrease in monetary support in mid-November, which is not a surprise,” commented for AFP Peter Cardillo of Spartan Capital Securities.

The rise in consumer prices picked up again in September in the United States, with inflation notably driven by rising energy prices and global supply chain disruptions.

In September, inflation accelerated to 0.4% over one month, from 0.3% in August, according to the CPI index. Compared with September 2020, prices are up 5.4%, more than the 5.3% year-on-year increase seen in August.

In addition, the Central Bank has released the minutes (the “minutes”) of its last meeting which show that it is ready to decrease its asset purchases in mid-November or mid-December. Members of the Monetary Committee expect to complete these purchases by the middle of next year.

For Peter Cardillo, the reduction in monetary support “is actually a good thing for the market”: “it shows that the economy is strong enough to work on its own and it lessens the prospect of high inflation”.

– Results season –

Investors mostly focused their attention on the opening of the earnings season with JPMorgan Chase, BlackRock and Delta Air Lines all exceeding expectations.

“The market is heating up with the idea of ​​the results of companies which should overall be good,” said the analyst from Spartan Capital. “It should take the market out of this cautious mood it has been in for a month.”

However, JPMorgan lost 2.38% to $ 161.43 as its strong third quarter results were made possible by a reduction in its credit reserves of $ 2.1 billion.

As for the airline Delta, down 5.76% to 41.03 dollars, the recovery of its profits was overshadowed by the prospect of more expensive fuel prices which could weigh on its balance sheet by the end of the year. ‘year.

From July to September, the company achieved net profit of $ 1.2 billion (or $ 1.89 per share), less than the profit of 1.5 billion made in the same period in 2019, before the start. of the pandemic.

BlackRock, the world’s leading asset manager, was hailed (+ 3.78% to $ 867.81) after reporting better-than-expected quarterly results, benefiting from the solid health of the stock markets and therefore the rise income from its commissions.

The group led by Larry Fink achieved between June and September a turnover of 5.05 billion dollars, up 16% over one year and higher than analysts’ expectations (4.9 billion).

Apple, the biggest stock market valuation, faltered, losing 0.42% to 140.91 dollars as the group risks not meeting production targets for its new iPhone before the holidays, due to the global shortage of chips electronic, according to Bloomberg News.

The electronics giant had planned to manufacture 90 million iPhones by the end of the year, but it will have to settle for 80 million, its suppliers like Texas Instruments (-0.73% to 187.10 dollars ) unable to meet the demand.

Bond yields on 10-year T-bills eased to 1.53% from 1.57% the day before, but those on two-year T-bills climbed to 0.35% from 0.33% Tuesday.

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