Reaction to Wall succeeds – Mild gains for Nasdaq, S&P, Dow unchanged

Wall Street was looking for a happy ending on Thanksgiving Eve, despite a strong negative start and increased volatility throughout the session, as investors focused mainly on the macroeconomic data released today and showed that the US economy continues to be developed, ignoring the indications for a faster tightening of monetary policy by the Federal Reserve.

Wednesday’s session began with indicators showing significant losses, amid rising inflation concerns, rising bond yields, but also concerns over the recent rise in coronavirus outbreaks and the imposition of new restrictions in various countries. .

But buyers were quick to react to the sellers’ attack, drawing on the positive data on the US economy but the “breath” offered by the slight de-escalation of US government bond yields, which allowed interest rate sensitive stock changes, such as those in the technology industry, to recover.

It is noted that the yield of the US 10-year has fallen slightly to 1.646%, having climbed earlier to 1.697%.

The positive elements for US growth, the labor market and the housing market helped change the investment psychology.

In particular, the data showed that the US labor market continued to recover strongly, with new US unemployment benefit applications last week at the lowest level since 1969. More specifically, the initial unemployment benefits applications in the regular programs of the states fell by 71,000 to the seasonally adjusted size of 199,000 for the week ended November 20, according to the US Department of Labor, lower than analysts’ estimates.

Meanwhile, the US Department of Commerce made a small upward revision of the data on the economic growth in the country, a move that reflects the strongest consumer spending. US GDP on an adjusted basis for inflation grew at an annual rate of 2.1% in the third quarter compared to the initial announcement of 2%, according to the Commerce Department.

New home sales in the United States rose 0.4 percent in October to a seasonally adjusted 745,000, according to data released Wednesday by the Commerce Department. New home sales in September stood at 742,000, according to final figures, up from the original estimate of 800,000, but higher than the 742,000 in September.

Meanwhile, although they initially struggled with data on commodity orders, which fell 0.5% in the US in October, refuting analysts’ estimates in a Wall Street Journal poll for a 0.3% increase, a closer look The data “relieved” economists, as it showed that the decline was due almost exclusively to fewer orders for aircraft, a category that shows large fluctuations and often distorts the level of aggregate demand in the wider economy.

Orders for non-defense capital goods, excluding aircraft, rose 0.6% last month, according to the Commerce Department.

However, the investment psychology continued to be troubled by the price rally in the US, which continued in October, with inflation showing the largest annual increase in the last 31 years, as shown by government data that saw the light of day today.

In particular, the cost of goods and services increased by 0.6% in October based on the index for personal consumption expenditures, according to data from the US Department of Commerce. Analysts in a Wall Street Journal poll expected the index to rise 0.4%. The latest rise has pushed the inflation rally over the past year to 5% from 4.4% in September. This is the highest level since December 1990.

The Federal Reserve considers the Consumer Price Index to be a more reliable measure of US inflation than the most well-known consumer price index. The latest measurement of the consumer price index showed that the cost of living increased to 6.2% which is also a high of 31 years.

Market volatility was boosted late in the afternoon by the publication of minutes from the last meeting of the Federal Reserve in early November, which showed that voices were rising in the Federal Open Market Committee (FMOC) to speed up tapering and possibly speed up interest rate hikes. inflationary pressures.

According to the minutes, although Fed officials estimate that inflation will decline next year, they admit that inflationary pressures may last longer than originally expected, which may bring the first rate hike closer.

However, given that the market has already discounted such a possibility, investors decided to temporarily ignore the issue of inflation and focus on the latest data on the US economy, thus helping the indices to close mostly upwards.

Indicators – statistics

Thus, the Dow Jones industrial average, despite the significant losses recorded at the beginning of the session and the pressures it continued to receive for most of the day, accelerated its pace in the last half hour and finally managed to close with marginal losses of 0.03% or 9.4 points lower, at 35,804.38 points.

On the contrary, the S&P 500, after several sign exchanges secured the plus and closed 0.23% higher at 4,701.46 points, a “breath” from its high at closing.

The technological Nasdaq also closed with gains, which showed the best picture today, as it found itself in positive territory early on and finally managed to close with gains of 0.44% at 15,845.20 points.

The picture in the shares of the blue chips index is almost divided, with 14 stocks closing higher and 16 with losses. The shares of Visa (2.40%), Intel (1.34%), Home Depot (0.92%) led the rise, while the biggest losses were recorded by the securities of Goldman Sachs (-1.76%), Honeywell (-1.75%) and Walgreens Boots Alliance (-1.62%).

Of the individual stocks, the Gap title recorded strong losses of 24%, after the clothing and accessories company announced quarterly results below expectations and revised its estimates for the whole year, citing problems in the supply chains.

Nordstrom shares also plunged 29%, which also announced third-quarter results that disappointed analysts.