Wall Street rises before the Fed, ends January on a positive note

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New York (AFP) – The New York Stock Exchange ended up on Tuesday, ending January on a very positive note, after a deluge of corporate results and on the eve of a Fed monetary meeting.

The Dow Jones index accelerated at the end of the session to climb 1.09% to 34,086.04 points. The technology-dominated Nasdaq rose 1.67% to 11,584.55 points and the broader S&P 500 index rose 1.46% to 4,076.60 points, according to final results.

“Investors are in a bull market mindset and are interpreting corporate results in a good way” especially “after taking profits on Monday” and pushing indices back, summarized Steve Sosnick, chief strategist for Interactive Brokers. (IBKR).

Despite mixed quarterly company results, “brokers are putting a positive spin on it,” he added.

The year 2023 got off to a good start for equities, after the difficult vintage of 2022. This month of January is the best month since July for the Nasdaq (+10.7%). The S&P 500 gained 6.2% over the month and the Dow Jones 2.8%.

Among the burst of results announced on Tuesday, UPS (+4.67% to 185.23 dollars), General Motors (+8.35% to 39.32 dollars) and ExxonMobil (+2.16% to 116.01 dollars) have impressed.

The express carrier posted a better-than-expected profit despite declining sales, while oil major ExxonMobil reaped historic annual profits (almost $56 billion) thanks to rising oil prices.

As for GM, in 2022 it regained the rank of leading car seller on the American market without lowering its prices. Its net profit in the 4th quarter climbed 15% to $2 billion.

On the disappointing side, McDonald’s (-1.26% to 267.48 dollars) warned that inflation would continue to weigh on its activity while the construction machinery giant Caterpillar (-3.51% to 252.32 dollars) showed lackluster results handicapped by unfavorable exchange rate effects.

Among the indicators, while consumer confidence for January, measured by the Conference Board, deteriorated, investors were reassured by a lower than expected employment cost index (+1% in the 4th quarter) .

After the close, Snap, Snapchat’s parent company, plummeted 14%. The application, which derives its revenue from , announced a loss in the quarter and the lowest growth rate in its history for its sales (+0.1% over one year).

Microprocessor manufacturer AMD, on the other hand, climbed 3.65% in post-closing electronic trading after better than expected results.

Paypal, which ended up 2.32%, was stable after the close as the electronic payments service announced the imminent loss of 2,000 jobs.

“But after tomorrow morning, this corporate news will be wiped out by the Fed,” warned Steve Sosnick.

The US central bank will announce its monetary decision at 19:00 GMT on Wednesday and markets expect it to reduce the scale of its rate hike to 25 basis points.

“I would be surprised if she did anything else, as for the market, it would be in shock,” summed up the IBKR analyst.

But the surprise will be to be found in the words of President Jerome Powell to know “if he pushes back the expectations of the markets” which hope for a break in rate hikes for the spring and even a reduction in these rates by the end of year, said Mr. Sosnick.

“I think the market is a little too enthusiastic that the Fed is going to declare victory (against inflation) so quickly and resume its accommodative monetary policy,” he said.

On the bond market, rates on 10-year Treasury bills fell to 3.50% against 3.54% the day before.

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