Wall Street recovering, ready to close a week of purchases.
Sentiment on the US stock market remains positive. At about 4 pm Italian time, the Dow Jones is up 0.28%, the Nasdaq is up 0.59%, the S&P 500 is +0.42%.
Yesterday the Dow Jones index gained more than 205 points (+0.61%), reporting the fifth consecutive session of increases, the longest since October. The S&P 500 rose by 1.10%, while the Nasdaq, supported by the post-quarterly Tesla buy boom (stock +11% approximately), jumped by 1.76%.
Since the start of the week, the Dow Jones and the S&P 500 have rallied 1.7% and 2% respectively, while the Nasdaq has rallied 3.2%, and is on track to end its best month since last July.
At around 1.27pm GMT, Dow Jones, S&P 500 and Nasdaq futures reflect investor caution, but selling is limited.
“This year’s equity rally is impressive and should not be ignored – commented in an interview with Bloomberg Chris Zaccarelli, head of the investment division of the Independent Advisor Alliance, in a note reported by CNBC – Unfortunately, probably the Fed will return to ballast the market, as early as the beginning of next week, so let’s be ready for volatility again this year. We may find ourselves in the eye of the storm and not entirely off the hook.”
On the Dow Jones, pay attention to American Express: the American financial giant disappointed the estimates on profits and turnover for the fourth quarter, but surprised positively with a better-than-expected outlook for 2023, also announcing a +15% increase in dividends . The title flies by almost 10%.
The Nasdaq is pricing in sharp sells on Intel stock today (down nearly 10% in afterhours trading) after the chip giant reports rather bleak Q4 2022 accounts and Q1 2023 outlook . Intel also affects other chip stocks, such as Advanced Micro Devices and Nvidia.
Intel announced it finished the last three months of last year with adjusted EPS of 10 cents, half the 20 cents expected by analysts polled by Refinitiv.
The semiconductor giant reported a net loss of $664 million in the fourth quarter of 2022, compared with earnings of $4.62 billion in the same period of 2021. Revenue came in at $14.04 billion, down from $14 .45 billion estimated, marking a 32% year-on-year decline.
Visa’s accounts were also announced yesterday, which beat expectations.
The US credit card and digital payments giant announced it finished the fourth quarter of 2022 with adjusted EPS of $2.18 and revenue of $7.94 billion, ahead of Refinitiv’s estimates of $2 earnings per share. .01 and revenues of $7.70 billion.
The accounts of the American oil giant Chevron have also been disclosed, which in the last few hours has announced a buyback plan worth 75 billion dollars and an increase in dividends. In the fourth quarter of last year, Chevron reported EPS of $4.09, below consensus expectations of $4.38 per share.
The data on US GDP for the fourth quarter of 2022 was published yesterday in the United States: American GDP rose at the annualized rate of 2.9%, beyond the +2.6% expected by the consensus of analysts.
The US economy does not seem to be slowing significantly: and this could be a problem for Jerome Powell’s Fed, who has left no doubts about his intention to significantly curb the economy’s fundamentals, so as to be able to slow down also the race of inflation.
The meeting of the FOMC, the monetary policy arm of the Fed, is approaching. The meeting will start next Tuesday 31 January, to end with the announcement on rates on Wednesday 1 February.
Markets expect Jerome Powell & Co. to hike fed funds rates further by 25 or 50 basis points. A positive indication from the macroeconomic front came today with the diffusion of the benchmark index of the inflation trend preferred by the Fed, ie the core PCE index.
The indicator confirmed the slowdown in inflationary pressures, rising on an annual basis by 4.4%, in line with expectations, after +4.7% the previous month. It is true however that, on a monthly basis, the core PCE advanced by 0.3%, as expected, however accelerating the pace from the previous 0.2% increase.
On the fixed income market, 10-year Treasury rates rise to 3.531%, while 2-year US government bond rates rise to 4.209%.