(Photo: Getty Images)
MARKET REVIEW. The New York Stock Exchange ended sharply higher on Tuesday, thanks to a hunt for bargains in a market less anxious than the day before, seduced by the prospect of a possible early end to monetary tightening by the American central bank (Fed).
The Toronto Stock Exchange closed the session up more than 100 points.
To (re)consult market news
Stock market indices at closing
In Toronto, the S&P/TSX ended up 105.26 points (+0.54%) at 19,694.16 points.
In New York, the S&P 500 advanced 63.53 points (+1.65%) to 3,919.29 points.
The Nasdaq rose 239.31 points (+2.14%) to 11,428.15 points.
The DOW rose 336.26 points (+1.06%) to 32,155.40 points.
The loon rose US$0.0024 (+0.3289%) to US$0.7309.
The oil fell US$3.32 (-4.44%) to US$71.48.
L’or fell US$8.20 (-0.43%) to US$1,908.30.
The bitcoin advanced US$373.93 (+1.55%) to US$24,564.33.
The context
After a topsy-turvy session on Monday, “there has been a change of mindset, at least in the short term, on the vulnerability of the American banking system,” noted Steve Sosnick of Interactive Brokers.
For operators, “the risk of banking contagion has evaporated and Wall Street has regained appetite for riskier assets,” added Edward Moya of Oanda in a note.
“We were therefore entitled to a rebound, fueled by the fear of some of missing out” on the restart, according to Steve Sosnick.
Martyred the day before, the regional and medium-sized banks flew away, led by First Republic (FRC)which rallied 26.98% to US$39.63 on Tuesday, after dropping nearly 62% the previous day.
Have also benefited from suction KeyCorp (KEY-PK, +18.54% to US$19.95), parent bank of Cleveland (Ohio) KeyBank, the Phoenix (Arizona) brand Western Alliance (WAL, +14.36% to 29 US$.87) and the Californian Pac West (PACW, +33.85% to US$13.05).
Less rowdy than the smallest establishments, the big American banks were also sought after on Tuesday, like Wells Fargo (WFC, +4.58% to US$40.17) or Citigroup (C, +5,95% à 47,40$ US).
The return of a certain serenity to Wall Street led to a movement of bond sales, which drove up their rates, which move in the opposite direction to their prices.
The yield on 10-year US government bonds rose to 3.68% from 3.57% the previous day.
The earthquake that hit the banking sector in recent days has changed the expectations of operators, who see the Fed ending its tightening cycle, after a final quarter-point increase in its key rate next week.
This vision was validated on Tuesday by the publication of the CPI consumer price index, which rose 0.4% over one month in February, as projected by economists.
Over one year, US inflation stands at 6%, against 6.4% in January. This is the most moderate pace since September 2021.
The New York market was also stimulated by the CEO’s announcement of Meta (META, +7.25% to US$194.02), Mark Zuckerberg, of a new wave of 10,000 job cuts, in addition to the 11,000 announced in November. In total, the social networking giant will have reduced its workforce by almost a quarter (-24%).
“If you reduce your workforce, that should improve your margins,” which appeals to investors, “but at the same time, healthy companies don’t make massive layoffs,” says Steve Sosnick. “But right now the markets are cheering.”
The prospect of the Fed’s possible end to rate hikes and Meta’s announcement propelled the entire tech sector, which helped the Nasdaq rise much more than the Dow Jones or the S&P 500.
Semiconductor manufacturers AMD (AMD, +6,63% à 87,45$ US), Broadcom (AVGO, +2.59% to US$632.46) and Intel (INTC, +3.93% to US$28.01) paraded, as didAlphabet (GOOGL, +3.14% to US$93.97).
Elsewhere on the coast, Uber (UBER, +5.00% to US$32.36) and Lyft (LYFT, +0.59% to US$8.51) rose on the heels of Monday’s decision by a California appeals court, which held that the law on the self-employed status of ride-hailing drivers (passenger vehicles with drivers) was not contrary to the California Constitution.
United Airlines was sanctioned (UAL, -5.37% to US$46.21) after revealing that it expects a first quarter loss, which would be the result of a new collective agreement for the pilots, even if an agreement did not not yet found with the Air Line Pilots Association union.