The New York Stock Exchange ended Thursday sharply higher, optimistic about the ability of the US central bank (Fed) to maneuver a soft landing despite a contraction in the US economy in the second quarter.
According to final results, the Dow Jones climbed 1.03% to 32,529.63 points, the Nasdaq by 1.08% to 12,162.59 points and the S&P 500 by 1.21% to 4,072.43 points.
“We are witnessing a very clear transition between a market which always reacted negatively to any information and a market turned towards the positive”, assured Adam Sarhan of 50 Park Investment.
Companies “publish results that are not great but expectations are so bad that the market reaction is moderate in terms of negativity”, indicated the analyst to AFP.
“If we add to that the fact that the Fed did not raise rates by one percentage point but only by 75 points, it is still a positive trait for the market,” he added, pointing out that Wall Street was still worried that the central bank would be more aggressive.
Yet the gross domestic product (GDP) of the United States contracted by 0.9% year on year in the second quarter, a figure worse than expected (+0.3%) which adds to the decline of 1.6 % already recorded from January to March.
But the equity market reacted with optimism: “there is a tendency to think that the recession will be moderate”, also indicated Jack Albin of Cresset Management.
“Looks like the Fed could have an easy way out in its fight against inflation, without inflicting too much pain on the economy,” Albin said.
“But I’m still waiting for the next inflation figures before declaring victory,” added the analyst.
– Hope for a mild recession –
Adam Sarhan shared this point of view: “yes, we are in a recession but this one could be very slight. And a slight recession is the best possible scenario”.
“It looks like we’re headed for a soft landing,” he said.
The Biden administration for its part set out to demonstrate on Thursday that the American economy remained “resilient”, minimizing the definition of a recession.
Janet Yellen, the Treasury Secretary, described instead “an economy in transition to more stable and sustainable growth”.
In the bond market, yields on ten-year Treasury bills fell moderately to 2.66%, but their lowest in four months.
On the side, Amazon, which concluded like the Nasdaq at +1.08%, took off like a rocket (+11.83%) in trade after the close when its results were announced.
The number 1 online retailer posted revenue up 7% to 121 billion dollars in the second quarter even though the group suffered a loss of two billion linked to a painful investment in the electric car manufacturer Rivian.
Apple also shone in electronic trading after the market closed (+2.45%), in the wake of profits, however down nearly 11%, but with iPhone sales that exceeded expectations.
Rare to fall among the large caps of the tech, Meta (Facebook) suffered the blow (-5.22%) following the announcement of a drop in turnover for the first time in its history, linked to competition from TikTok and advertiser spending cuts.
Mark Zuckerberg’s group has also suffered a rebuff from the American competition authority (FTC) which prevents it, for reasons of market dominance, from buying a specialist in virtual reality, Within Unlimited.
The airline Spirit (+5.60%), finally acquired by Jetblue (-0.36%) for 3.8 billion dollars, soared while Frontier (+29.50%), which threw the ‘sponge, has been ultra-researched.
Semiconductor giant Intel, which ended down 1.17%, plunged 10.10% after the close after disappointing quarterly results and outlook.
The other major players in the sector, such as Nvidia (+1.09%) or AMD (+2.06%), on the other hand, did well, especially after the adoption in the American Congress of a support law for the sector.