(CercleFinance.com) – Very quiet session, positive from the first exchanges, but with spreads quickly stabilizing around +0.4%: investors remain relatively calm, but not very active, 48 hours before the FED press conference on Wednesday (8pm).
Although the gains are modest, this extends an extraordinary streak of 11 consecutive gains for the Dow Jones (+0.5% to 35,410), a 10th of 11 for the S&P500 (+0.4% to 4,554) and a 9th of 11 for the Nasdaq (0.2% to 4.08) (+1).
The ‘rebalancing’ of the weightings within the Nasdaq was largely integrated as it did not cause any turmoil on Friday, neither this Monday when trading resumed… nor in the following hours.
The ‘Soxx’ semiconductor index, which fell -3.75% last week, ended flat at 510.65: Applied Materials rose +1.4%, but ASML lost -1.3%, Intel -1.2%, AMD -0.3%.
On the GAFAMT side, Alphabet rose +1.3%, Tesla +3.5%, Amazon lost -0.9%.
The ‘S&P’ was supported by financials with Keycorp +4%, Discovery Fnl and Citizens Financial with +3.6%, Zion Group +2.6%, Bank of American +2.1%, Goldman Sachs +2% then by mining companies with Freeport +3.7% and especially oil companies with Halliburton +3.6%, Occidental +2.6%, Cherons +2.6%, Cherons +2.6%.
In fact, and this is the ‘fact of the day’, the barrel of WTI rose by +2.65% towards $79, pulverizing the resistance of $77, for the first time since April 28th.
On the bond side, T-bonds reversed the trend during the hours: the 10-year yield initially fell -4Pts below 3.800%, but it worsens tonight +4Pts to 3.8800% (perhaps because fuel costs will rise).
However, the US private sector ‘PMI’ saw its growth slow again significantly in July, according to S&P Global, whose composite PMI stood at 52.0 – a five-month low – in the flash estimate for the current month, compared with 53.2 in June.
“Service providers observed a lower increase in their production, while manufacturers reported largely unchanged production levels at the beginning of the third quarter”, specify the investigators.
On the Fed side, a 25 basis point hike (vs. 5.50%) seems very likely despite recent progress in the fight against inflation… but it could be the 11th and last in a row if the Fed listens to the consensus of investors who dream of this scenario.
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