(Boursier.com) – The New York Stock Exchange rebounded Wednesday evening, shortly before the announcement of the US Federal Reserve, which is supposed to deal a blow by raising its main benchmark price by 75 basis points (three-quarters of a point), in order to combat spiraling inflation to 8.6 % in May in the US, the highest in 40 years.
Two hours of closing, a few minutes of Fed decisions expected at 8:00 p.m. (French time), and Dow Jones The general index rose 0.69% to 30,567 points (after -3.2% on Monday and Tuesday) S & P500 It rebounded 1.06% to 3775 points (after -4.1% on Monday and Tuesday). Regarding Nasdaq Compositewhich is rich in technology and biotech stocks, rose 1.85% to 11,028 points, after falling 4.68% on Monday and rebounding slightly by 0.16% on Tuesday.
The S&P 500 has fallen since Monday in a “bear market” (down more than 20% at its peak), losing 21% from its Jan. 3 peak, at 4,796 points at the close. The Nasdaq, for its part, is giving up more than 30% at its November 2021 high, and the Dow Jones is down about 17% at its January high.
According to recent market expectations, the Federal Reserve should raise the rate of “fed funds” by three-quarters of a point (75 basis points) to bring it between 1.50% and 1.75%, and should indicate its intention to continue its monetary tightening at its level. Upcoming meetings, in steps of 50 or even 75 basis points. The Fed will also publish on Wednesday its new multi-year forecast for the economy and rates, which will be closely watched.
The 75bp increase will be the first tightening of this size since 1994. It will be stronger than what markets had expected until recently (+50bps). But last Friday’s announcement that inflation had accelerated to 8.6% in May in the United States, after 8.3% in April, when economists were counting on stability, sharply increased the urgency of a hard strike to stem price increases.
The foundation’s president, Jerome Powell, should comment on these decisions during a press conference from 8:30 p.m. France time.
Wednesday’s session was also marked by the publication of several macroeconomic indicators, which showed weakness in the economic situation, with a sudden drop in retail sales in May …
Thus these sales fell 0.3% in May over one month, versus the FactSet consensus of +0.2% and after a 0.7% increase in April. Excluding autos, retail sales rose 0.5% against the consensus of 0.7% and +0.4% in April. But excluding cars and gasoline, US consumption finally increased by just 0.1%, versus 0.5% in the market consensus and 0.8% in the previous month.
Moreover, the US real estate market appears to have slowed, with the National Association of Home Builders (NAHB) real estate market index falling to 67 in June from 69 in May and the consensus is at 68.
Another disappointment, the New York Fed’s Empire State Manufacturing Index came in at minus 1.2 points in June, indicating a contraction in activity, while the FactSet consensus was at +5.
The US import price index rose 0.6% in May in one month, slightly less than expected (+1%). On the other hand, the Export Price Index rose more than expected, by 2.8% versus +1% of the FactSet consensus. Over the course of a year, import prices jumped 11.7% and export prices jumped 18.9%.
As for the Atlanta Fed Inflation Expectations, which measures the one-year outlook from a business perspective, held steady at 3.7% in June as in May.
Finally, US corporate inventories in April rose 1.2% in one month, versus 1.3% market consensus and 2.4% in March.
Oil markets fell on Wednesday after the announcement of a sudden increase in oil reserves in the United States last week. A barrel of light US West Texas Intermediate crude (July futures) fell 1.5% to $117.09 on the NYMEX, while Brent North Sea crude in August was down 1% to $119.91 on the Chicago Mercantile Exchange.
According to the US Department of Energy, domestic crude stocks, excluding strategic reserves, rose by 2 million barrels during the week ending June 10 to 418.7 million barrels. The consensus was based on a drop limited to 1.3 million. Gasoline stocks fell 0.7 million barrels (+1 million barrels consensus), and distillate stocks were also down 0.7 million barrels (+0.2 million barrels consensus).
In the foreign exchange market, the dollar index settled at 105.42 points (-0.09%) against a basket of reference currencies, at its highest level in nearly 20 years, in October 2002, before announcements from the Federal Reserve. The euro rose on a yearly basis, rising 0.9%, and then falling 0.15% to $1.0401, after the European Central Bank’s emergency meeting on bond tensions within Europe. The European Central Bank promised to show “flexibility” in its monetary policy to calm the recent tensions and increase the spread (“spread”) between German and Italian government bond yields in particular.
He went It rose 0.3% on Wednesday to close at $1,819.60 an ounce for the August Comex futures contract. The Bitcoin It continues its descent into hell, dropping nearly $20,000 in the morning and around $20,900 in the evening, down 4.9% over a 24-hour period, and at an 18-month low.
The crypto sector is affected by the announcement of crypto lending platform Celsius Network, which had to freeze withdrawals in the face of “extreme market conditions”, in the current context of price hikes.
Values to follow
Baidu (+1%) is still trapped on Wall Street, while according to Bloomberg and Reuters, the Chinese search engine is in discussions with a view to selling its largest stake in iQiyi In a deal, the video-on-demand platform is valued at nearly $7 billion. Reuters quoted two sources familiar with the matter. Baidu holds 53% of iQiyi’s share capital within a unit that pools together assets considered non-strategic.
Discover Warner Bros. (+5%) is seeking to cut up to 30% or nearly 1,000 jobs from its global advertising sales team, a person familiar with the matter told Reuters. The company on Tuesday began offering an option for members of its ad sales team in the United States to voluntarily leave the company, the source said, adding that the global ad sales team has about 3,000 members. The company’s chief financial officer, Gunnar Wiedenfels, in April reaffirmed its $3 billion goal of savings following the $43 billion merger between Discovery and AT&T’s Warner Media. Wall Street questioned the long-term outlook for the streaming industry after the rally during the pandemic.
Hertz Global It rebounded 9% on Wall Street, while the US car rental company just announced a new $2 billion share buyback program, compared to a market capitalization of barely more than $7 billion. This new buyback plan comes just seven months after the previous one, which also reached $2 billion and was revealed in November 2021. The $200 million is still to be bought back under the previous program. Thus, Hertz is now in a position to acquire $2.2 billion of its stock, or more than 30% of the capital prior to the announcement.
apple (+1%). Apple TV+ will become the streaming platform for North American soccer, or “soccer,” a sport that is gaining traction across the Atlantic. Thus, the American smartphone giant and the main player in video broadcasting was chosen, on Tuesday, to broadcast all matches of the Major League Soccer (MLS) around the world, the North American soccer championship, starting in 2023 and for a period of 10 years only to subscribers of the show Apple TV + streaming. . Financial terms of the deal were not disclosed, but Sports Business Journal estimated the 10-year deal was valued at $250 million per season starting in 2023. Apple didn’t say how the matches would be billed to Apple TV+ customers. Apple noted that its $4.99-per-month subscribers will be able to access “a wide range of MLS and League Cup matches, including some of the most important,” at no additional cost. The group is also planning to offer a paid show for those who want to watch all the matches and broadcasts.
ExxonMobil (Fixed). US President Joe Biden has sent letters to the oil giants, noting that refining margins are “much higher than normal” and which he considers “unacceptable.” The message comes as high oil prices push a gallon of gasoline (about 3.8 liters) to $5 in the US, lowering household purchasing power in a context of general inflation. Biden had already attacked oil groups in recent days, in particular ExxonMobil, who says he’s making “more money than God” this year. In letters to the managing directors of major energy companies, the US president once again stresses the need for efforts to counter rising oil prices. Biden is asking CEOs to explain their record margins in this wartime period and raise their output. The US president wants the leaders of the oil groups to make efforts to reduce the impact on consumers.
Qualcomm (Fixed). An EU court has overturned a fine of 997 million euros imposed four years ago on Qualcomm by the European Commission for securing the exclusive supply of chips from Apple.
Boeing (+5%). The European Aviation Safety Agency (EASA) said civil aviation regulators in the United States and Europe will hold a meeting next week with Boeing regarding the 777X, which has not yet received certification.