Tuesday, 24 Apr 2018
News Uncategorized

Wall Street, optimistic about the results, ends at records

Wall Street climbed to new records on Friday, buoyed as since the beginning of the year by investor optimism about the US economy and the corporate earnings season, which began this week.
According to the final results, the Dow Jones Industrial Average, the flagship index of Wall Street, gained 0.89% to 25,803.19 points, the Nasdaq, with strong technological coloration, 0.68% to 7,261.06 points and S & P 500 index widened by 0.67% to 2,786.14 points.
On the week, marked by a bout of weakness Wednesday, the Dow has appreciated 2%, the Nasdaq 1.7% and the S & P 500 1.6%.
“There is no point in shouting at the wolf” in the face of the relentless surge in record-breaking indexes since the beginning of the year, commented Gregori Volokhine of Meeschaert Financial Services. “When you have an economy that accelerates, companies whose profitability improves, that’s normal.”
Wall Street has entered this week in the heart of the earnings season, including Friday the figures of major financial institutions.
“Analysts have not yet incorporated in their forecasts the effects of tax reform (…) and the stock market is just getting ahead of them,” said financial advisor Hugh Johnson for whom the growth of the US economy in 2018 could achieve through this new law 3.5%.
From the money earned, companies “can either reward employees or shareholders through the payment of dividends or share buybacks, which they have already started doing,” Johnson said.
The question is whether they will also “invest in new equipment, buy new businesses or increase their business” to nurture their growth in the long term, said the specialist.
JPMorgan Chase (+ 1.65% to 112.67 dollars), the first US bank in terms of assets, has ensured on the occasion of the publication of its results on Friday that this law would allow it to increase its investments .
The tax reform has already been good for Wells Fargo, allowing it to record an exceptional gain of $ 3.35 billion over the fourth quarter. The bank has also set aside $ 3.25 billion to cover the legal costs of various scandals, including the opening of 3.5 million fictitious accounts. The title lost 0.73% to 62.55 dollars.
– Changes on Facebook –
On the indicators side, the price increase in the United States was lower than expected in December (+ 0.1%) due to lower prices in the energy sector. But excluding energy and food, the CPI consumer price index advanced 0.3% in December, the largest increase since January 2017.
The bond market reacted strongly to these figures.
The yield on 2-year Treasury bills has returned above 2% for the first time since September 2008, while that on 10-year bills has jumped to 2.59% before relaxing and evolve to 2.548% around 21H40 GMT against 2.537% Thursday night. That of 30-year bills was 2.855% against 2.867% the day before.
“The bottom line of the report (on inflation) is that it should not change the idea that for the Fed (the US central bank), three rate hikes this year are still on the table, “advanced Patrick O’Hare of Briefing.
Among the other values ​​of the day, Facebook was shaken (-4.47% to 179.37 dollars) by the announcement of a major overhaul of network content, where priority will be given to shared publications.
Advanced Micro Devices fell 0.99% to $ 12.02 after reporting that its exposure to the Specter security flaw, which affects the microprocessor industry, was larger than initially expected.

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