(New York) The New York Stock Exchange moved higher on Friday shortly after the opening, stimulated by a further easing of bond rates, but also by good news on inflation, which gives hope for a status quo from the American central bank (Fed).
Around 9:55 a.m. ET, the Dow Jones was up 0.23%, the NASDAQ index was up 1.21% and the broader S index was up 1.21%.
The day started in the right direction, with a further deceleration in bond rates. The yield on 10-year US government bonds stood at 4.51%, compared to 4.57% the day before, at the close.
Wall Street then welcomed the PCE report on consumer prices in August, which showed a small jump in the raw index, to 3.5% year-on-year compared to 3.4% in July, but also highlighted a shift in inflation excluding energy and food.
It was 3.9% over one year. This is the first time since September 2021 that the core index (excluding energy and food) is below 4%.
Operators also noted that inflation-adjusted consumption was up 0.1% over one month, while economists saw it as stable.
“Consumer spending remains positive and inflation is slowing, which is good news for central bankers,” commented Rubeela Farooqi of High Frequency Economics.
“We still expect a downgrade in growth as well as less pressure on prices, which should prompt the Fed to stand still by the end of the year,” she added.
“This core PCE index a little below expectations has relieved Wall Street,” observed Edward Moya of Oanda. “This suggests that the disinflation process is clearly at work, which somewhat alleviates concerns about a further rate hike by the Fed” by the end of 2023.
After the publication of the PCE report, operators no longer attributed a probability of more than 30% to the scenario of a final increase.
This wind of optimism carried large technological capitalizations, the driving force of the rating since the start of the year, like Amazon (2.03%), Nvidia (2.23%) or Meta (2.18 %)
“If the market convinces itself that the Fed is done, this could support stocks, even if it will not trigger a massive buying wave,” anticipated Edward Moya.
Many uncertainties still hover over the New York market, regarding the trajectory of the economy, which is already in a slowdown phase and could be affected by an extension of the strike in the automobile sector and a possible suspension of certain transport services. the State (“shutdown”).
Negotiations appear to have stalled in Congress on a budget agreement, mainly due to a schism within the Republican Party. In the absence of compromise, the American federal state will have to considerably scale back starting Monday.
As for the automobile industry, the UAW (United Auto Workers) union must announce work stoppages on Friday at new sites of the three manufacturers Ford (0.36%), General Motors (0.02%) and Stellantis (0.18 %), to push them to make concessions on the new collective agreement.
Nike was gaining speed (8.70%) after reporting quarterly net profit significantly above expectations, even if its turnover came out slightly below expectations. Chief executive John Donahoe said he was confident in demand for the end of the year, particularly in China.
Probable end of stock market run for the pioneer of meal kits to prepare at home Blue Apron (133%), which will be bought by the meal delivery platform Wonder Group for around $103 million. Overtaken by competition, the New York group has seen its valuation divided by a hundred since its listing on Wall Street in 2017.
Home-cooking meal kit pioneer Blue Apron will be acquired by meal delivery platform Wonder Group for around $103 million. Caught up by competition, the New York group had seen its valuation divided by a hundred since its entry on Wall Street in 2017, even if Wonder Group’s offer caused the price to jump on Friday (133%).
