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MARKET REVIEW. Wall Street, which had initially welcomed a slowdown in US inflation, finally ended in the red on Wednesday as the minutes of the last Fed meeting put the possibility of a slight recession in the States back on the table. -United.
Toronto, for its part, posted a slight gain on Wednesday, as the major US indexes slipped on the heels of the release of fresh inflation data.
To (re)consult market news
Stock market indices at closing
In Toronto, the S&P/TSX posted an increase of 106.74 points (+0.52%) to 20,528.59 points.
In New York, the S&P 500 collected 8.94 points (+0.22%) to 4,117.88 points.
The Nasdaq gained 8.75 points (+0.07%) to 12,040.63 points.
The DOW rose by 101.23 points (+0.30%) to 33,786.02 points.
The loonie fetched US$0.0015 (+0.1994%) to US$0.7442.
Oil gained US$1.55 (+1.90%) to US$83.08.
Gold gained US$3.20 (+0.16%) to US$2,022.20.
Bitcoin was down US$287.45 (-0.95%) at US$29,982.12.
In Toronto, the S&P/TSX advanced 32.47 points (+0.16%) to 20,454.32 points.
In New York, the S&P 500 fell 16.99 points (-0.41%) to 4,091.95 points.
The Nasdaq dropped 102.54 points (-0.85%) to 11,929.34 points.
The DOW retreated 38.29 points (-0.11%) to 33,646.50 points.
The loon closed up US$0.0016 (+0.2151%) at US$0.7443.
The oil ended up US$1.73 (+2.12%) at US$83.26.
L’or rose US$10.40 (+0.52%) to US$2,029.40.
The bitcoin fell US$255.73 (-0.85%) to US$29,964.49.
The context
The New York Stock Exchange spent half of the session in the green, welcoming, with caution however, inflation slowed to 5% over one year in March, better than expected, according to the CPI index, against 6% in February on twelve months.
However, investor enthusiasm was tempered by the fact that so-called core inflation—which excludes volatile sectors like food or energy—remained high year-on-year at 5.6%, versus 5. 5% the month before.
While energy prices fell, allowing general inflation to subside, housing and transport prices continued to rise.
“There are encouraging signs (…), but with underlying inflation still high, there is a good chance that the Fed will continue its tightening with another last rate hike of 25 basis points during its next monetary meeting”, scheduled for May 2 and 3, commented Paul Ashworth, economist for Capital Economics.
In the second part of the session, the minutes (“minutes”) of the last monetary meeting of the Fed in March raised questions, bringing to light a difference of opinion between the economists of the institution and its Monetary Committee.
The team of economists estimated that the recent banking difficulties could lead “to a slight recession in the United States”.
Despite this advice, and that of non-voting members inclined to take a break from rate hikes, the Federal Reserve Monetary Committee (FOMC) had voted, unanimously, for another 25 percentage point rate hike.
Dissensions
“There will be dissension” within the FOMC at the next meeting in early May, warned Ryan Sweet, chief economist for the United States at Oxfordeconomics.
” What a day ! We have learned so much! “, commented for AFP Edward Moya, analyst for Oanda.
“Investors have been reading and re-reading these minutes amid concerns that Fed officials are becoming more nervous about the economic outlook and the consequences of the banking problems,” he said.
The analyst recalled that as of Friday several large banks will disclose their results: “they will have to reveal their balance sheets and if they hesitate to do so, it means that there are problems”, he warned.
Added to this was the fact that underlying inflation remained tenacious in March, which will “lead the Fed to soon signal that it will have to keep rates high for longer than the market expects. “, further explained Mr. Moya.
“All of this has reduced risk appetite among investors,” he concluded.
On the value side, the huge container carrier Triton International (TRTN) jumped more than 32% after signing an agreement for its acquisition by Brookfield Infrastructure (BIP.UN), which should take it out of the rating. The acquisition is valued at $13.3 billion, including debt.
The e-commerce platform Shopify (SHOP) gained 1.16% after a favorable analyst rating, but several big names in the tech sector lost ground such as Block (SQ) (electronic payments, -5.54%), the video communication specialist Zoom (ZM) (-3.59%) or the streaming group year (YEAR) (-5,47%).
Airlines have stalled as their earnings forecasts have been revised downwards. So American Airlines (AAL) dropped 9.22%, United (UAL) 6,50% et Delta (FROM) 2,43%.