Strong start to the week on Wall Street

Wall Street indices returned to bullish territory after the short break caused by data on the impressive resilience of the labor market, rekindling fears of further aggressive moves by the Fed.

In particular, the Dow Jones industrial index is moving upwards 0.84% or 276 units at 33,080 unitsthe broader S&P 500 gains by 0.95% at 4,184 unitsas did the tech-weighted Nasdaq which is showing gains 1.5% at 12,847 units.

On Friday, Wall Street appeared spooked by a show of strength in the US labor market, with data showing more than double the estimate of new jobs in July (528,000 versus a forecast of 250,000).

However, the bearish move on the final day of the trading week did not stop the indexes from posting their third consecutive five-day gain, with the major US index, the S&P 500, now recovering 13% from its mid-June lows.

In any case, investors’ eyes are now on the burning front of inflation, awaiting Wednesday’s new report on the path of prices in July.

According to the average estimate of analysts at “Dow Jones”, the consumer price index (CPI) is expected to show a slowdown to 8.7% in July from a 40-year high of 9.1% it showed a month ago.

“While it is clear that the Fed must continue to tighten monetary policy, there are still about six weeks until its next meeting, and we remind investors that economic data can change very quickly,” said Robert Schein of Blanke Schein Wealth. Management.

“The CPI data will help confirm whether the Fed’s tightening efforts have been successful in starting to lower inflation, or whether tighter tightening is needed,” he adds.

After the extremely strong labor market data, however, US interest rate futures have fully reversed, now giving a 68.5% chance of a 75 basis point hike at the Fed’s September meeting, up from about 41% before the payrolls report. of July.

With US stock returns subdued, however, the tech giants are making a comeback today.

Indicatively, Tesla is up more than 4.5% and Facebook parent Meta by 4%, while Apple, Alphabet and Amazon move more than +1%.

On the contrary, strong losses of up to 5% were recorded by the title of Nvidia, which announced revenue of 6.7 billion dollars for the second quarter when the guidance of the microchip giant was 8.1 billion.

Palantir is under even greater pressure, plunging 13% after announcing unexpected losses for the second quarter.

In the opposite direction is Signify Health, which is rallying 15% amid reports that CVS Health is in acquisition talks.

The day’s performance, however, goes to Bed Bath & Beyond, which explodes 35% as it appears to have become the new darling of WallStreetBets, the reddit forum of micro-investors who tune in to stocks.

In other news, the US Senate on Sunday passed a $430 billion bill to fight climate change, lower drug prices and raise some corporate taxes.

“Overall the bill is positive,” comments Thomas Hayes of Great Hill Capital LLC.

“The biotech and pharmaceutical industries are expected to recover from some uncertainty because (the bill) was less damaging than first estimated as it relates to drug price negotiation,” he explains.

According to him, many companies may accelerate their share buybacks as they now have an incentive to catch the 1% tax.