2023-05-17 21:22:30
(Photo: Getty Images)
MARKET REVIEW. Wall Street closed sharply higher on Wednesday, buoyed by hopes of an agreement on the US debt ceiling, after some optimism expressed by President Joe Biden.
The Toronto Stock Exchange closed higher as strength in the energy sector offset weakness in other groups.
To (re)consult market news
Stock market indices at closing
In Toronto, the S&P/TSX gained 54.36 points (+0.27%) to 20,296.43 points.
In New York, the S&P 500 rose 48.87 points (+1.19%) to 4,158.77 points.
The Nasdaq rose 157.51 points (+1.28%) to 12,500.57 points.
The DOW rose 408.63 points (+1.24%) to 33,420.77 points.
The loon rose US$0.0014 (+0.1821%) to US$0.7435.
The oil closed up US$1.81 (+2.55%) at US$72.67.
L’or fell US$7.30 (-0.37%) to US$1,985.70.
The bitcoin raked in US$316.02 (+1.17%) to US$27,287.00.
The context
“Progress in the debt ceiling talks has lifted stocks,” summarized Edward Yardeni of Yardeni Research.
During a speech to the press at the White House before his departure for Japan where he must participate in a G7, President Joe Biden said he was “confident” on Wednesday in obtaining an agreement on the ceiling of debt ensuring that a default by the United States will be avoided.
“I have confidence that we are going to have an agreement on the budget and that America is not going to default,” the president said, repeating that such a default would be “catastrophic for the American economy and the people. American”.
For his part, the leader of the Republicans in the House of Representatives Kevin McCarthy also declared himself Wednesday “optimistic about the ability to work together”.
Congress has the prerogative to authorize the United States, the world’s largest borrower, to issue more debt by raising the limit on its borrowings.
And the Republican opposition – majority in the House of Representatives and which has a blocking minority in the Senate – refuses this green light, demanding cuts in social spending.
This standoff “has been seen many times and it has always been resolved,” commented LBBW’s Karl Haeling.
Banks searched
According to him, the market reacted not only “to the optimism on the debt, but also to the optimism on the banks”.
Following regional bank Western Alliance’s announcement of an increase in deposits during the quarter, regional bank stocks were highly sought after.
Western Alliance (WAL) closed up 10.19% at US$34.81, PacWest (PACW) 21.66% to US$5.56, Zions Bancorporation (ZION) by more than 12% at US$26.17, as Comerica (CMA, +12,33% à 38,09$ US).
The banking sector thus led the rise in the market (+2.68%) ahead of the energy sector (+2.53%) driven by a jump in oil prices which also reacted positively to optimism on the American debt.
On the bond market, yields on Treasury bills, which move inversely to the price of the bond, have tightened.
The 10-year rates climbed to 3.57% against 3.53% the day before and those at two years to 4.16% against 4.08%.
On the value side, the supermarket chain Target (TGT) advanced 2.58% to US$160.96 after reporting better-than-expected first-quarter results, while adopting a cautious tone on consumer sentiment and sales expectations. The brand also warned of the impact of numerous thefts in its stores.
Thursday, the markets will watch the results of the giant Walmart (WMT, -0.17% to US$149.53) ahead of Wall Street’s open.
L’action Tesla (TSLA) climbed 4.41% to US$173.86 after an interview with its boss Elon Musk on Tuesday on the financial channel CNBC. The billionaire promised he would spend more time running the electric car maker now that he has hired a female Twitter executive.
Cisco ended higher (CSCO, +1.51% to US$47.63), but then dropped a little in electronic trading (-0.36%). The telecommunications specialist has yet raised its profit and turnover forecasts for the year.
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