Wall Street: moral hazard alimentato dalla Fed?
June 23, 2020
Wall Street higher on signs of recovery, Nasdaq hits record high
June 23, 2020(New York and Toronto) Wall Street started the week on a high note on Monday and its highly technological index, the NASDAQ, benefited from the good health of several major stocks, including Apple and Microsoft, to finish at a record.
Its flagship index, the Dow Jones Industrial Average rose 0.59% to 26,023.45 points.
NASDAQ gained 1.11% to 10,056.47 points, breaking its previous record on June 10.
The index notably benefited from the rise of Apple (+ 2.62%). The California giant announced at its annual developer conference on Monday that it will build its own chips for Mac computers, ending a long-standing partnership with Intel.
Microsoft also rose sharply (+ 2.78%) and was not penalized on the stock market by the announcement of the imminent closure of its video game streaming platform Mixer, which failed to compete with the Twitch service from Amazon (+1.45%).
The S&P 500, which represents the 500 largest companies on Wall Street, appreciated by 0.65% to 3,117.86 points.
The Toronto Stock Exchange composite index took 42.70 points to end the session with 15,516.90 points.
The World Health Organization reported a record increase in global cases of viral infections on Sunday, with cases increasing in several US states.
But gold, technology and consumer staples did not follow normal business trends in Monday’s response.
Tech stocks in the U.S. were solid to suggest a good recovery while cruise lines and airlines did the opposite reading and had a terrible day.
“In Canada, you have gold and the grocery stores – which are usually the ones that go well when things go wrong – but gold is booming and the grocery stores are collapsing today, so it’s a bit scattered, ”said Michael Currie, vice president and investment advisor at TD Wealth Management.
Currie said the virus was definitely on top of people’s radar at the moment, and it is seen as a measure of economic recovery.
The materials sector posted the best gain on the TSX on Monday, gaining 2.8%. Gold prices peaked at two months, increasing from US $ 13.40 to US $ 1,766.40 an ounce, while copper prices took 4.15 US cents to US $ 2.65 a delivered.
“Very often when we see that gold is at its best, it is not a good day for markets as a whole,” Currie said in an interview.
The information technology sector advanced 1.3% in Canada.
The energy sector developed positively, with crude oil exceeding US $ 40 per barrel to reach its highest level in almost four months. The crude oil contract for August delivery rose 90 cents US to $ 40.73 US per barrel in New York.
“The stocks of the grocers, generally stable and safe, are at their lowest today, which would be what you would expect to see when people are very, very optimistic about a recovery, and it would be the opposite with gold, ”continued Mr. Currie.
He said the signals were the most contradictory he had seen on the market in a long time.
In the foreign exchange market, the Canadian dollar traded at an average price of 73.83 cents US, up from its average price of 73.60 cents US on Friday.
“Investors are impassive despite the increase over the weekend in the number of cases of coronavirus” in several American states, observes Peter Cardillo of Spartan Capital Securities.
“It has in no way confused the markets,” said the expert.
If New York, the city most affected by the virus in the country, took a new step on Monday in its exit from containment with the reopening to the public of non-essential businesses, several states of the South and West (Florida, Montana, Nebraska, Oklahoma) have seen a spike in the number of positive cases.
Among the indicators of Monday, resales of old homes in May were down sharply, 9.7% from April, according to data from the National Federation of American Real Estate Agents (NAR) published Monday.
This fall is the result of containment measures in previous months, but a rebound could take place as early as next month, said the Federation.
The market will closely follow US figures this week on durable goods orders, inflation, first quarter gross domestic product and unemployment benefit claims.
In the bond market, the 10-year rate on the US debt rose to 0.7085% around 4:40 p.m. compared to 0.6937% on Friday evening.
Virgin Galatic takes off
Among the values of the day, Virgin Galactic soared 15.93%. The space tourism company said Monday it had signed an agreement with NASA to send individuals to the International Space Station.
American Airlines fell 6.75% after announcing on Sunday it was looking for some $ 3.5 billion in new financing, including 1.5 billion via the sale of shares and convertible securities, 1.5 billion via the sale of guaranteed securities and 500 million thanks to a line of credit.
Its competitor United Airlines, which could issue some $ 5 billion in debt this week, according to the Bloomberg agency, fell 0.81%.
The American meat giant Tyson Foods lost 2.85%. China has suspended imports of the group’s chicken due to an increase in the number of infections among workers at the Springdale, Arkansas plant. Tyson Foods, for its part, ensured that it maintained healthy working conditions and took all the necessary precautions.
