(News Bulletin 247) – US equity markets rose sharply on Tuesday, with the rating taking full advantage of the relief brought by moderate inflation figures, which argue for a pause in the cycle of rate hikes.
At the end of the morning, the Dow Jones advanced 1% to 33,869.7 points, while the Nasdaq Composite climbed 2.6% to 11,487.7 points.
Since the publication last week of indicators showing a slowdown in inflation, investors seem to want to put into perspective the fear of an acceleration in prices which would lead the Fed to further tighten its monetary policy.
This impression was largely confirmed this morning by the publication of a producer price index (PPI) showing an unexpected slowdown in inflation.
According to the Department of Labor, producer prices rose 0.2% in October compared to the previous month, their increase also reaching 0.2% excluding food and energy.
Over the last twelve months, the rise in producer prices stood at 8% in raw data, marking a marked slowdown after +8.4% in September.
These inflation figures mean that a rate hike of just 50 basis points in December now seems all but a given, with 85% of traders betting on the option, compared to less than 15% for a 75 basis point hike.
These statistics caused the dollar and bond yields to fall, with a particularly strong relaxation on rates since that of 10-year US government bonds fell below 3.90%.
The greenback for its part fell by 0.3% against the euro, which is approaching 1.0360 dollars.
The US currency and bond yields will take another test tomorrow with the release of US retail sales figures, which will help take the pulse of consumer spending in the country.
In the meantime, the rating remains animated by a new series of results
quarterly, mainly on the retail side.
Walmart climbed 8.5% after raising its forecast on the occasion of the publication of its quarterly results and launching new share buybacks for 20 billion dollars.
The Home Depot chain of DIY stores is also well oriented after the announcement of quarterly performances that also came out above expectations.
Netflix jumped 8% as analysts at BofA resumed tracking the value with a buy recommendation, justified by business prospects deemed favorable by 2024.
The weakness of the greenback does not benefit oil, the barrel of American light crude losing 1.1% to 84.9 dollars.
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