Wall lost its upward momentum amid rising US bond yields

LAST UPDATE: 19.30

Wall Street stock indexes turned negative despite their initial uptrend on Thursday, with investors incorporating the latest corporate results in the US in their estimates and movements, including the strong profit recorded by Tesla, but also to be discouraged by the increase in US government bond yields shortly before the new “spells” by the staff of the US Federal Reserve for the course of monetary policy in the coming period.

On the dashboard, the industrial Dow Jones strengthened by 17.86 points or 0.05%, with the widest S&P 500 to lose 6.92 points or 0.17% and the technological Nasdaq to record a drop of 64.10 points or 0.48%.

The index was up more than 1% in the first half of the session, but the rise in bond yields shortly before a scheduled speech by Fed Chairman Jerome Powell changed the market climate.

The yield on the 10-year US government bond reached 2.94%, very close to its highest levels since December 2018.

Corporate results continue to be under the microscope of investors, with Tesla’s share gaining more than 6% after higher-than-expected quarterly earnings, mainly on the basis of increased vehicle deliveries. The results of Elon Musk’s company were greeted by analysts with rave reviews.

“United adds 12% as the airline predicts a profitable 2022.” I have never seen in my career – and I have been in the industry for many years – such an astonishing surge in demand, “CEO Scott Kirby told CNBC. and referring to business trips, but also to leisure trips.

On the “opposite” bank, the share of Warner Bros. Discovery is down 8.3%, after reports that the company will put a “padlock” on CNN +.

More than 17% of S&P 500 companies have announced results, with about 81% exceeding analysts’ estimates, according to FactSet.

Fed Chairman Jerome Powell is expected to sit at the International Monetary Fund’s “round table” later in the day.

Despite the market forecast for a series of aggressive interest rate hikes by the central bank, Fed officials in recent days have dropped the tone, stressing that “dramatic” moves should not be expected.

Fed Branch Presidents Mary Daly in San Francisco, Charles Evans in Chicago and Raphael Bostic in Atlanta have noted that while interest rate hikes are needed to curb inflation, they do not want the Bank’s moves to stand in the way of economic expansion. USA. Daly said a tightening of monetary policy could theoretically lead to a mild recession in the country, although he did not see this as the prevailing scenario.

The president of the Fed of St. Louis, James Bullard, is on another wave, stressing that he would be open to raising interest rates as high as 0.75% at the May meeting in a bid to curb inflation.

“We are dealing with a rather divided market,” said Dave Grecsek, general manager of investment strategy and research at Aspiriant. “Some of the most defensive value stocks are producing good returns. The other side of the coin is some tech names, ‘growth’ stocks that are expected to suffer in the near future,” he added.

Of the 30 Dow shares, 20 are positive and 10 are negative. The profits are led by those of Dow Inc., IBM, Verizon while those losses of Salesforce, Chevron, Home Depot.

Unemployment benefit applications in the US remain low for many years

The number of new unemployment benefits in the US remained at the bottom of many decades this week, with the labor market confirming the strong period in which it is.

In particular, in the week ended April 16, 184,000 Americans applied for unemployment benefits, a number that was marginally reduced by 2,000 from the previous week and slightly higher than the analysts estimate in Reuters for 180,000.

At the same time, the number of applications for extension of existing benefits fell by 58,000 to 1.417 million, remaining at its lowest level since 1970.