Wall Street opens higher after positive news from China

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Wall Street opens higher after positive news from China

(New York) The New York Stock Exchange opened modestly higher on Tuesday after positive news from China and its zero-tolerance policy towards COVID-19.

Around 2 p.m. GMT, the Dow Jones index gained 0.82%. The NASDAQ advanced 0.25% and the S&P 500 0.65%.

The Dow had fallen back on Monday breaking last week’s momentum, ending at 31,572.00 points (-0.20%). The tech-heavy NASDAQ index fell 0.72% to 12,083.50 points and the broader S&P 500 index lost 0.30% to 3921.50 points.

“Beijing has halved the quarantine length for travelers arriving in China, the biggest shift yet in its policy to fight the pandemic that has isolated the country and fueled economic concerns,” National’s Art Hogan said. Securities in a note.

The analyst also pointed out that the People’s Bank of China is committed to maintaining a favorable monetary policy to support the economy, with credit stimulation.

But for Peter Cardillo, of Spartan Securities, the New York place was above all “focused on the monetary policy of the American Central Bank (Fed) and on inflation”.

“The market has already priced in a recession and a lot of negativity,” he said.

New York Fed President John Williams assured CNBC on Tuesday that a US recession was not his “baseline scenario”.

“The economy is strong,” he said, expecting growth to slow to between 1% and 1.5% over the year for the world’s largest economy.

However, these forecasts are weaker than those of the Fed released in mid-June, which bet on a 1.7% expansion.

This week, the last of the quarter, was also an opportunity for brokers and pension funds to “clean up their balance sheets,” Cardillo said.

This should “cause purchases”, especially of so-called classic value stocks “which have been beaten and are considered cheap”, added the Spartan Capital analyst.

Among the indicators, real estate prices, according to the Case-Shiller index, slowed their growth in the United States for the first time in months to +20.4% over one year in April, due to the rise in interest rate which makes real estate loans more expensive.

Yields on 10-year Treasuries rose very slightly to 3.21% from 3.19%, remaining far from their highs of two weeks ago after the Fed monetary meeting.

Oil and the dollar were up.

Listed, the banks Goldman Sachs (+2.48%) and Morgan Stanley (+4.17%) climbed after raising their quarterly dividends following a green light in the Federal Reserve’s stress tests ( +2.74%) and Wells Fargo (+3.01%) did the same.

Home appliance maker Whirlpool was hailed (+1.10%) after announcing its exit from the Russian market by signing an agreement to sell its operations in the country to a Turkish manufacturer, Arcelik. The divestment is expected to lead to a second-quarter loss of $300 million to $400 million for Whirlpool, the group said in a filing to SEC securities regulators.

The American chain of drugstores and pharmacies Walgreens advanced by 1% after having decided to keep the brands of Boots pharmacies in the United Kingdom and the cosmetics company No7 Beauty.

“Due to market instability which is severely affecting funding availability, no third party has been able to make an offer that adequately reflects the high potential value of Boots and No7 Beauty Company,” explained , in a press release, Walgreens, which hoped to value these subsidiaries at more than 7 billion dollars.

– The Toronto Stock Exchange on the rise

The strength of the energy sector and the rise in the price of crude oil allowed the Toronto Stock Exchange to advance late Tuesday morning, while the major American indices fell.

The Toronto floor’s S&P/TSX7 composite index climbed 72.39 points to 19,330.71 points.

In the currency market, the Canadian dollar was trading at 77.63 US cents, up from its average rate of 77.60 US cents the previous day.