Wall Street: 1st quarters send S&P and DJ to zenith
October 11, 2024 at 10:35 pm
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What a finale! What a fireworks display: the session, the week and the bullish sequence that began at the end of October 2023 came to a close on a high note, with an array of absolute records, and new impressive intraday/close doubles to boot. Historic performances once again uncorrelated with interest-rate trends and the geopolitical context.
One positive factor - which did not exist the previous day - was the good results posted by the banks that opened the quarterly results and provided the positive impetus that investors had been hoping for. Wells Fargo posted +5.6%, JP-Morgan +4.5%, Blackrock +3.6% (with assets under management reaching a record $11,500 billion)... and among those that did not publish, Bank of America climbed +5%, Zions +3.5%.
This boosted the S&P500 (+0.6%) to 5,815pts (with a record high of 5,822, the 45th of the year) and the Dow Jones, which soared +1% to 42,864pts (after peaking at 42,899.8, which means that the 43,000 mark was quoted, just 17 sessions after crossing the 42,000 mark, the threshold crossed 2 months after the 41,000 mark).
The Nasdaq clawed back just 0.3%, strongly slowed by Tesla's -8.8% (below $220), the day after the presentation of 'Robotaxi' and its 'Optimus' android. Broadcom also dropped -2.3%, which was offset by AMD's +2.3% (processors competing with Nvidia.... which ended unchanged.
Michael Brown, senior research strategist at Pepperstone, remains cautious: "the start of the third-quarter earnings season this Friday presents a risk".
With consensus EPS figures lowered by around 4% in the last quarter, companies have room to surprise positively", points out the strategist, who therefore expects a fifth consecutive quarter of overall profit growth.
On the macroeconomic front, U.S. consumer confidence worsened slightly, according to the index calculated by the University of Michigan (UMich), which stands at a preliminary estimate of 68.9 for the current month, compared with 70.1 for September.
This drop - where economists were expecting a slight rise instead - reflects declines in both the current assessment component (-0.6 points to 62.7) and the expectations component (-1.5 points to 72.9).l The Labor Department reports that US producer prices stagnated in September compared with the previous month, and rose by 0.1% on a core basis (excluding food, energy and commercial services).
But expressed in annual variation, while the rise in 'gross' US producer prices remained stable at 1.8% in August, as expected, it accelerated from +2.8% to 3.2% excluding food, energy and commercial services, propelling US yields to new highs since the end of July, with the '10-yr' reaching 4.11% in the session before ending the week close to 4.100%, at 4.0960 on the eve of the weekend, while the '30-yr' peaked at 4.407%. The '2-yr' improved to 3.9550% from 4.000% on Thursday.
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