Wall Street, deceived by the resistance of the American economy, is coming to an end
The New York Stock Exchange ended higher on Thursday, cheered by a series of better-than-expected indicators that compounded the thesis of a soft landing for the US economy, a favorable scenario for equity markets.
The Dow rose 0.61%, the Nasdaq gained 1.76% and the broader S&P 500 gained 1.10%. The S&P 500 ended Thursday at its highest close in nearly two months.
The star figure of the day was US fourth-quarter growth of 2.9% year-on-year, better than the 2.8% expected by economists, the US Treasury Department said on Thursday.
“The economy continues to look very resilient despite sharp interest rate hikes,” said Chris Zaccarelli of the Alliance of Independent Advisors. .”
For once not special, all the macroeconomic lights were green on Thursday, especially the new weekly jobless claims, which fell to the lowest level since April 2022.
“It’s the opposite of what we’re reading in the headlines right now,” said Nick Reece of Merck Investments, referring to announcements of layoff plans, mainly in the technology sector.
Another notable fact was the increase in durable goods orders (+5.6%) in December, which was more than twice what economists expected (+2.5%).
Even the real estate market, which has been contracting for several months, rose with an acceleration in new home sales in December compared to the previous month.
Despite this picture of a sunny US economy, the bond market reacted only modestly. The yield on 10-year US Treasuries rose to 3.49% from 3.44% the day before the close.
A few weeks ago, “when the data was good, we were worried that the Fed would be more aggressive in terms of monetary policy,” recalls Nick Reece, who often corrects indexes and raises bond rates.
“But today, good news is well received and bad news is negative,” he said. “It’s a more normal relationship” between indicators and markets.
An economy in better-than-expected health, stabilizing rates, has encouraged watchdog investors to turn to tech, growth or simply overlooked stocks in 2022.
Meta (+4.10%), Alphabet (+2.51%) and Microsoft (+3.07%) were in particular demand, but it was Tesla (+10.97%) that won the bet the day after the post-market record was published results that exceed expectations.
Investors did not hold against the manufacturer for the slight contraction in its margins, especially related to the price cuts. As of January 3rd, Tesla bought almost 50%.
Despite better-than-expected results (down -1.37% to $377.14), operators were worried that the credit and payment card specialist’s growth was slowing.
Southwest Airlines was punished (-3.32% to $35.68) after posting an unexpectedly large net loss, largely due to monster disruptions experienced by the company during the storm’s passage in late December.. Winter Elliott. 800 million dollars to him.
Rival American Airlines performed better in the fourth quarter, beating estimates (+2.15% to $16.61).
Online news site BuzzFeed (+119.88% to $2.09) has followed up with an article from the Wall Street Journal reporting a partnership with Meta to help content creators generate more traffic on Facebook.
Announcements of social plans have been increasing for several weeks. Next up on Wednesday was computer company IBM (-4.50% to $134.43), which announced plans to cut 3,900 jobs.
- Nasdaq
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