2023-08-04 01:32:08
(Photo: Getty Images)
MARKET REVIEW. The New York Stock Exchange, which moved sharply into the red Thursday in the session, in the wake of the degradation of the credit rating of the United States by Fitch, moderated its losses at the close.
The Toronto Stock Exchange closed Thursday down nearly 100 points, despite the strength of its energy sector.
Also Read: US Debt: What Does Losing Triple A Mean?
To (re)consult market news
Stock market indices at closing
In Toronto, the S&P/TSX dropped -97.47 points (-0.48%) to 20,120.74 points.
In New York, the S&P 500 lost -11.50 points (-0.215%) to 4,501.89 points.
The Nasdaq decreased by -13.73 points (-0.10%) to 13,959.71 points.
The DOW fell -66.63 points (-0.19%) to 35,251.89 points.
The loon lost -$0.0002 (-0.03%) to $0.7491.
The oil was up +US$2.26 (+2.8431%) to US$81.75.
L’or was down -US$5.00 (-0.25%) at US$1,970.00.
The bitcoin increased by +US$201.18 (+0.69%) to US$29,326.17.
Context
“The correction in the bond market affected all assets” Thursday, said Jeanne Asseraf-Bitton, manager at BTF IM.
“We started again on a period of tension on the American long rates”, caused at the same time by “the announcements of the American Treasury which revises upwards its estimate on the issues of securities” for the third quarter and “the surprise lowering rating of Fitch the day before” of the credit rating of the United States, detailed the analyst.
Same opinion with Karl Haeling of the LBBW bank for whom the downgrading of the American debt rating “has above all drawn attention to the American budget deficit which will be much larger than expected”, leading to a flood of issues of US Treasury debt that investors will have to absorb.
On the bond market, since Tuesday, rates on long-term Treasury bills have continued to rise. Around 4:50 p.m., the yield on ten-year bills stretched sharply to 4.17%, and that of thirty years was at 4.29%, both at their highest since October 2022.
On the old continent, the German 10-year rate was 2.60% against 2.52% the day before closing.
In addition, “we are in a phase of monetary tightening which will eventually impact businesses”, explained Jeanne Asseraf-Bitton, referring to the policies of the American and European central banks to fight against inflation.
The markets thus “tend to take profits”, especially since the first part of the year was prosperous, noted the manager.
Investors were waiting to look to the aftermath of corporate results with two big announcements after the US close: Amazon (AMZN) gained more than 7% to US$128.91 in post-close electronic trading after reporting earnings well above expectations, while the stock ofApple (AAPL) dropped 1.28% to 191.17 $US following a small increase in profit on a slightly lower turnover.
Qualcomm dives in New York
The electronic chip manufacturer Qualcomm (QCOM) plunged 8.18% to US$118.70 in New York. Its quarterly profit came in above forecasts, but its revenue disappointed and the group reported weaker sales for phone-related chips.
The utilities sector declines
The rise in rates led to the decline of the “utilities” sector, according to the expression used by analysts. Translated as “community services” in French, the sector mainly includes companies related to water, gas and electricity.
A Paris, Engie (ENGI.PA) fell 1.61% to US$14.40 and Veolia (VIE.PA) from 3.46% to US$27.89. In Milan, Enel (ENEL.MI) fell 1.15% to US$6.01. To Madrid, Iberdrola (IBE.MC) fell 1.51% to US$10.75 and Enagas (ENG.MC) from 0.66% to US$15.78. In London, SSE (SSE.L) fell 1.28% to US$1,619.00.
Oerlikon and Infineon fall the most in Europe
Among the values of the pan-European Stoxx 600 index, the Swiss group Oerlikon (OERL.SW) posted the biggest drop of the session (-11.03% to US$4.1800 in Zurich), followed by the German Infineon (IFX.F) (-9.15% to US$35.06 in Frankfurt).
The German semiconductor maker announced a 61% rise in net profit in the last quarter, but analysts at Oddo BHF regret that the company did not raise its outlook given the performance of other companies in the sector. Oerlikon has lowered its target for 2023 in the face of falling demand in textiles, which is pushing some of its customers to postpone their machine orders, particularly in China.
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