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Stock market: Wall Street retreats, digests its recent increases

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MARKET REVIEW. The strength of the telecommunications and utilities sectors allowed the Toronto Stock Exchange to post an increase late Thursday morning, while the major American indices retreated, catching their breath after more than two weeks of almost uninterrupted gains, between disappointing macroeconomic indicators and falling oil prices.

To (re)consult market news

Stock market indices at noon

In Toronto, the S&P/TSX posted an increase of 28.59 points (+0.13%) to 22,104.55 points.

In New York, the S&P500 yielded 11.03 points (-0.24%) to 4,591.42 points.

the Nasdaq lost 46.66 points (-0.32%) to 14,395.62 points.

the DOW dropped 135.46 points (-0.38%) to 35,093.35 points.

the loon was down US$0.0004 (-0.0449%) at US$0.8009.

the oil was down US$4.08 (-3.78%) at US$103.74.

I’Where rose from 9.70 US$ (+0.50%) to 1,948.70 US$.

the bitcoins lost US$692.09 (-1.47%) to US$46,462.69.

The context

“It’s the end of the month, the end of the quarter, and we’ve just had a strong movement over the past two weeks,” commented Adam Sarhan, founder and managing director of 50 Park Investments. “So for now it looks like the market is digesting. It’s perfectly normal and even healthy.”

On the macroeconomic side, investors had widely anticipated the acceleration of inflation in March, illustrated by the publication on Thursday of the PCE index, which showed a 6.4% rise in prices over one year, in line with expectations.

On the other hand, economists were surprised by the slowdown in consumption and the increase in disposable income in February in the United States.

“High prices, falling real incomes (adjusted for inflation) and disposable income, as well as the decline in available savings, are unfavorable to households, even if the job market continues to grow” , put forward, in a note, Rubeela Farooqi, chief economist of the firm High Frequency Economics.

In general, “ongoing concerns about growth could be a factor” in Wall Street’s pullback, according to Patrick O’Hare of Briefing.com, who mentioned poor PMI activity indices in China for March.

The index for the services sector even fell to its lowest level since February 2020, the start of the coronavirus pandemic.

On the geopolitical front, investors were frankly renouncing the optimism born on Tuesday of what appeared to be a diplomatic breakthrough on Ukraine, but was not followed by concrete developments.

According to its secretary general, Jens Stoltenberg, NATO is expecting new Russian offensives in Ukraine and does not believe in even a partial withdrawal.

The VIX index, which measures market volatility, rose slightly on Thursday.

A good part of the values ​​which had benefited from the cavalcade of the last two weeks posted a marked decline, like the manufacturer of semiconductors AMD (-4.62%),Uber (-2.95%) or the cryptocurrency exchange platform Coinbase (-1.92%).

On the other hand, cruise passengers stayed the course, still supported by a new opinion from the Centers for Disease Prevention and Control (CDC), the main American health agency, which no longer recommends avoiding cruises to avoid contracting the coronavirus.

Carnival (+1.58%), Norwegian (+1.97%) and Royal Caribbean (+ 1.72%) thus all started the session in the green.

“If the digestion (of the market) results in massive selling”, warned Adam Sarhan, “then it will not be a digestion, but a resumption of the downtrend” which had shaken the New York place since the beginning of the year, before the improvement of the last two weeks.

“On the other hand, if it is contained, with low volatility and reduced volumes, it would show that buyers are still in control,” added the manager.

Is popular resume was sanctioned (-6.62% to 36.27 dollars), as well as Dell, after the lowering of the recommendation of Morgan Stanley, which provides for difficulties in the PC market due to uncertainty about the economic situation.

The pharmacy chain Walgreens did not benefit (-6.55% to 44.35 dollars) from quarterly results above expectations, supported by vaccinations against COVID-19 and tests, in its branches or in home kits.

Several oil companies were pulling back as the market awaits the announcement by US President Joe Biden of a ramp-up in the use of strategic black gold reserves.

According to several American media, the head of state plans to draw one million barrels a day for six months, or about 180 million barrels. The information caused crude oil prices to fall by more than 5%.

ExxonMobil (-0.49%) and Chevron (-0.69%) were both in the red.

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