MARKET REVIEW. The Toronto Stock Exchange partially recovered from its early morning weakness, but nevertheless closed at its lowest level in 16 months, weighed down by losses in its three largest sectors.
The New York Stock Exchange ended in mixed order, thanks to a rebound at the end of the session following statements by members of the American central bank (Fed), which spoke of a lower rate hike than expected in July.
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Stock market indices at closing
In Toronto, the S&P/TSX closed down 286.13 points (-1.54%) at 18,329.06 points.
In New York, the S&P500 fell 11.40 points (-0.30%) to 3,790.38 points.
the Nasdaq rose by 3.60 points (+0.03%) to 11,251.19 points.
the DOW fell 142.62 points (-0.46%) to 30,630.17 points.
the loon lost US$0.0081 (-1.0521%) to US$0.7624.
the oil advanced US$0.17 (+0.18%) to US$96.47.
L’gold closed down US$27.50 (-1.58%) at US$1,708.00.
the bitcoin raked in US$902.85 (+4.57%) to US$20,647.34.
The market reacted to statements by two members of the Federal Reserve, Governor Christopher Waller and St. Louis branch chairman James Bullard, who both spoke out for a 0.75 percentage point hike on Thursday. rate at the next meeting on July 26 and 27.
“They have insisted publicly in recent months to take precedence over inflation” and raise rates, said Christopher Vecchio of DailyFX. “So the fact that they are both suggesting that 0.75 points is appropriate gives the market reason to reconsider the idea that a one point rise is in the pipeline.”
On Wednesday, investors reacted badly to the release of a much better than expected CPI price index and were betting that the Fed would instead opt for a one-point hike in July, a first in the modern era.
After the public outings of the central bankers, they once again favored the hypothesis of 0.75 points.
For Quincy Krosby, of LPL Financial, Wall Street was also sensitive to other comments from Christopher Waller, who estimated that the economy was not in recession and that it would even continue to grow, at a faster pace. slow.
The analyst nevertheless warned that nothing was decided yet as for the July meeting, certain indicators being able to modify the opinion of the central bankers.
The market will notably follow the results of the University of Michigan’s survey on consumer confidence, which asks them in particular about their 5-year inflation forecasts.
“If these forecasts go up significantly, it will become difficult for the Fed,” she said.
Overall, investor sentiment remains low, and most of the data released Thursday only added to the gloom.
Before the opening, the banks JPMorgan Chase (JPM, US$108.00, -3.49%, -3.91 points) and Morgan Stanley (MS, US$74.69, -0.39%, -0.29 points) had each published results below analysts’ forecasts, whether for turnover or net profit.
In question, the brake on the investment bank, while 2021 had been a good year for IPOs and mergers and acquisitions.
JPMorgan Chase also saw its result affected by the increase in provisions for bad debts, a sign of a slight deterioration in the economy, while the bank had, on the contrary, released reserves at the same time last year.
The market is expecting many companies to deliver disappointing results, which should lead to a “value recalibration” of stocks lower, according to Quincy Krosby.
The macroeconomic indicators of the day only weighed down the climate a little more.
New weekly jobless claims rose again to 244,000, a figure above economists’ expectations.
As for the producer price index (PPI) for June, it also came out above forecasts, at 1.1% over one month, against 0.8% expected, which indicates, according to Mahir Rasheed, of Oxford Economics, that there is “more inflation in the pipes”.
The rebound at the end of the session benefited Apple (AAPL, US$148.47, +2.05%, +2.98 points) and Microsoft (MSFT, US$254.08, +0.54%, +1.36 points)with most very large caps ending in the green.
The agency Nikkei (NI225, +0.62%, +164.62 points) stated the intention toIntel (INTC, US$37.71, +1.34%, +0.50 points) to raise its prices, which has benefited the entire semiconductor sector, whether Qualcomm (QCOM, US$141.90, +4.62%, +6.26 points), Broadcom (AVGO, US$484.64, +0.60%, +2.91 points) Where AMD (AMD, US$78.60, +1.39%, +1.08 points).
The action of the American pharmaceutical group Novavax (NVAX, -18.33 points) plunged 26.20%, to 51.62 dollars, after the publication of an opinion from the European Medicines Agency reporting cases of strong allergic reactions to its vaccine against Covid-19.
In the wake of JPMorgan Chase and Morgan Stanley, the banks have made the big back, from Goldman Sachs (GS, $281.59, -3.05%, -8.87 points) at Bank of America (BAC, US$30.13, -2.30%, -0.71 points).