2023-05-16 16:57:03
(Photo: Getty Images)
MARKET REVIEW. Losses in the energy sector pulled back the flagship index of the Toronto Stock Exchange late Tuesday morning, shortly after the release of data showing an increase in annual inflation in April.
The New York Stock Exchange opened lower, hurt by two markers of consumption in the United States, namely the results of the Home Depot chain and retail sales for April, which point to a slowdown in consumer spending. Americans.
To (re)consult market news
Stock market indices at noon
In Toronto, the S&P/TSX fell 217.80 points (-1.06%) to 20,322.17 points.
In New York, the S&P 500 fell by 9.94 points (-0.24%) to 4,126.34 points.
The Nasdaq rose by 33.21 points (+0.27%) to 12,398.42 points.
The DOW posted a decline of 204.44 points (-0.61%) to 33,144.16 points.
The loon rose US$0.0005 (+0.0661%) to US$0.7432.
The oil retreated US$0.07 (-0.10%) to US$71.04.
L’or lost US$22.10 (-1.09%) to US$2,000.60.
The bitcoin rose from US$532.28 (+1.98%) to US$27,406.39.
The context
“The market is disappointed with the results of Home Depotcommented Quincy Krosby of LPL Financial.
The DIY store chain (HD, -1.49%) published sales well below expectations, down 4% year on year. Considered one of the barometers of consumption in the United States, the group admitted that its sales were “under pressure”.
In addition to the deceleration in the housing market, “there is a general deterioration in spending,” noted Neil Saunders of GlobalData, “as people cut back on non-essential purchases.”
“This is Home Depot’s worst quarter in a long time,” said Adam Sarhan of 50 Park Investments. “It shows that the consumer may be weaker than previously thought, which would increase the likelihood of a recession by year-end.”
Added to this were retail sales for April in the United States, which came out up only 0.4%, against 0.8% expected by economists.
These data “suggest that household spending will decelerate in the second quarter”, anticipated, in a note, Rubeela Farooqi, of High Frequency Economics.
The picture is nevertheless mixed, as sales excluding automobiles, gasoline, building materials and food did better than expected, with growth of 0.7%, against 0.3% announced.
“The results of Target (TGT, Wednesday) and Walmart (WMT, Thursday) will be important to have a better perception of consumers,” said Quincy Krosby, about the two retail giants.
In the immediate future, Home Depot’s communication penalized the entire distribution sector, from direct competitor Lowe’s (-1.51%), to Target (-0.26%). Conversely, the e-commerce giant Amazon escaped the movement (+1.21%).
For Quincy Krosby, the direction of the indices is also explained by “concerns related to the negotiations on the debt ceiling”.
US President Joe Biden is due to meet with parliamentary opposition leaders, including Republican Speaker of the House of Representatives Kevin McCarthy, on Tuesday to try to find a compromise. But the latter said on Monday that the two camps still had positions “distant” from each other.
A sign that the political crisis is beginning to have a concrete impact on the market, the rate of one-month US Treasury bills reached its highest level in at least twenty years on Tuesday, at 5.57%. Treasury Secretary Janet Yellen repeated on Monday that the United States could be forced to default on its debt as soon as early June, failing an agreement.
On more distant maturities, bond rates rose slightly. The yield on 10-year US government bonds was 3.54%, against 3.50% the day before closing.
On the side, the laboratory Horizon Therapeutics (HZNP, -18.19%) was weighed down by information from the Bloomberg agency, according to which the American competition authority, the FTC, is preparing to take legal action to block its acquisition by the biotech Amgen (AMGN, -0.78%). The transaction was announced in December for $27.8 billion.
online banking Capital One (COF, +4.14%) benefited from the equity investment of Berkshire Hathaway, Warren Buffett’s holding company, which bought nearly a billion dollars worth of shares in the McLean (Virginia) group in the first quarter.
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