(News Bulletin 247) – The New York Stock Exchange ended higher on Friday evening following the publication of inflation statistics that seemed to rule out the threat of an acceleration in rate hikes.
At the end of the session, the Dow Jones advanced by 0.8%, while the Nasdaq progressed more clearly, winning 1.4%.
According to the Commerce Department’s monthly report, the rise in the PCE price index excluding food and energy – the Fed’s preferred measure of inflation – slowed to +4.6% in May, from +4.7 % in April.
From the point of view of investors, the slowdown in the rise in basic prices partly reduces the pressure on the shoulders of the Fed, which was alarmed last week by the persistence of inflation.
The unaccommodating remarks made last week by its chairman, Jerome Powell, before Congress, had indeed fueled speculation of at least two further rate hikes by the end of the year, which had raised the dollar and bond yields, and decline in equity markets.
According to analysts, the Federal Reserve may be encouraged by the deceleration in the rise in the price of services, the strength of which it was beginning to find worrying.
‘We know that this measure of inflation will have a decisive influence on monetary policy by the end of the year,’ recalls Jack McIntyre, manager at Brandywine Global, a subsidiary of Franklin Templeton.
“I am still among those who expect inflation to fall more sharply in the second half of 2023 and then in 2024 under the effect of the aggressive monetary tightening that has already taken place,” he adds.
The 10-year Treasuries yield is down following the inflation report to around 2.82% from 2.85% yesterday, while the dollar loses ground against all the reference currencies including the euro, which oscillates around 1.0910 dollar.
On the values front, Apple has again become, with a gain of 2.3%, the first American listed group to cross the threshold of 3,000 billion dollars in market capitalization.
Nike fell 2.7% at the end of the session after a publication in respect of the fourth accounting quarter described as “mixed” by analysts who also point to the “a bit fair” prospects of the sports equipment manufacturer.
Disney ends in the green despite a downgrade from KeyBanc analysts who say they prefer to steer clear due to uncertainties surrounding the media giant’s business.
Constellation Brands lost 0.4% after announcing for its first quarter 2023-24 EPS up 9% to 2.91 dollars on a like-for-like basis and operating profit increased by 4% to 827 million dollars.
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