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MARKET REVIEW. The New York Stock Exchange ended up Friday, at its highest in a month, overcoming alarming echoes of the banks on the American economy, thanks to an indicator which signals that the morale of American consumers is improving.
The Toronto Stock Exchange advanced nearly 150 points thanks to widespread gains.
To (re)consult market news
Stock market indices at closing
In Toronto, the S&P/TSX rose 148.90 points (+0.74%) to 20,360.10 points.
In New York, the S&P 500 gained 15.92 points (+0.40%) to 3,999.09 points.
The Nasdaq rose 78.05 points (+0.71%) to 11,079.16 points.
The DOW rose by 112.64 points (+0.33%) to 34,302.61 points.
The loon closed down US$0.0015 (-0.2046%) at US$0.7466.
The oil advanced US$1.70 (+2.17%) to US$80.09.
L’or closed up US$25.10 (+1.32%) at US$1,923.90.
The bitcoin closed up US$983.80 (+5.21%) at US$19,848.70.
The context
The Nasdaq chained a sixth consecutive session of increases and the three indices ended at their highest level for a month.
The session had started in the red on a market tense by the communication of several large American banks on the state of the economy and its prospects.
The four major financial institutions that opened the earnings season on Friday all did better than analysts expected.
However, investors initially retained the increase in provisions for bad debts, a sign of a deterioration in the economy, and rather pessimistic comments.
JPMorgan Chase (JPM, +2.52% to US$143.01) is now expecting a “moderate recession”, while the CEO of Bank of America (BAC, +2.20% to US$35.23), Brian Moynihan told him of an “increasingly marked slowing economic environment”.
Wells Fargo (WFC, +3.25% to US$44.22) and Citigroup (C, +1.69% to US$49.92) also saw their provisions increase, the second justifying them by “a deterioration in macroeconomic forecasts”.
Investors also noted that consumers were using their credit cards more, according to banks, raising fears of an increase in delinquencies.
But after this bad initial impression, “the market recovered with the publication of the consumer confidence index”, based on a monthly survey by the University of Michigan, explained, in a note, Edward Moya, from Oanda.
The index stood at 64.2 points in January, well above December (59.7) and economists’ expectations (60.7).
Operators also welcomed the development, according to the same survey, of consumer inflation expectations, which see it at 4% in one year, against 6.5% currently.
Wall Street’s slight bout of weakness at the start of the session “was seen as a buying opportunity”, deciphered Patrick O’Hare, from Briefing.com, for whom the New York market continues to benefit from momentum. bullish.
The operators also relativized, in a second time, the speech of the banks. We are preparing for a moderate recession, “but not for a hard landing,” said Patrick O’Hare.
The S&P 500 ended Friday above an important technical threshold, namely the average of the last 200 trading days.
To go further, we will need satisfactory business results, warns Art Hogan, of B. Riley Wealth Management.
“Next week, the attention will be focused solely on this” as well as on the forecasts of these companies for the coming months, announces the analyst. “We will be able to assess whether or not our estimates are close to reality.”
Among the companies that were part of the first wave of results was also Delta Air Lines (DAL, -3.54% to US$38.20), which also did better than analysts expected.
The title was nevertheless shunned by operators, disappointed by the company’s forecasts for the first quarter, which includes an increase in non-fuel costs, linked to salary increases.
Elsewhere on the coast, Tesla came under attack again (TSLA, -0.94% to US$122.40), after lowering the prices of most of its models in the US and Europe.
The manufacturer has cut the price of its model Y by almost 20%. The decision must in particular allow American buyers to benefit from the reductions provided by the government to promote the development of electric cars in the United States.
This Tesla initiative has penalized the entire automotive sector, from General Motors (GM, -4.75% to US$36.51) at Ford (F, -5.29% to US$12.72), via another electric vehicle specialist, Rivian (RIVN, -6.43% to US$16.45).
The health insurer UnitedHealth (UNH, -1.23% to US$489.57), the leading weighting of the Dow Jones, was shunned despite better-than-expected results and the confirmation of its forecasts, in a favorable context for the technology sector and growth stocks .
Bond rates rose after the release of the University of Michigan survey. The yield on 10-year US government bonds stood at 3.49%, against 3.44% the day before.