The bullish momentum on Wall Street seems to show no signs of stopping, especially since the uncertainty destabilizing European stock markets (-1.5% to -2% this Thursday) seems to be stimulating a buying trend on the other side of the Atlantic (the “communicating ship” phenomenon).
So, after some hesitation in the morning, with records being broken one after the other, and even if it wasn't as monolithic a bullish session as Wednesday (which was hard to top, as it was one of the best sessions of the year), the US indexes, which started in record territory, resumed their upward trend after 6:30 pm and rose linearly for more than three hours to finish at their highest.
The S&P 500 rose +0.23% to 5,434, the Nasdaq rose +0.35% to 17,767, and the Nasdaq 100 rose +0.57% to 19,576 (high 19.639, with Nvidia +3.5% to $129, Broadcom +12.5% and Tesla +2.9% to $182.5 setting new records).
There seems to be an irresistible pull towards 20,000 points for the Nasdaq-100 and towards 5,500 points for the S&P500… and even more so as US interest rates continue to fall.
The 10-year fell -5 percentage points to 4.245%, while the 2-year, which is more sensitive to short-term expectations, fell -6 percentage points to 4.69% (i.e. a -30 percentage point drop in the week after the NFP release).
The US figures from the day bolstered US investors' confidence in disinflation. Statistics released by the Labor Department on Thursday showed that the US Producer Price Index (PPI) unexpectedly fell 0.2% in May (up 2.2% year-on-year) due to lower energy prices, keeping the US economy in a slump.
Economists had expected a 0.1% increase from the previous month (+0.5% in April).
The “core” index, which measures underlying pressures on producer prices excluding food, energy and commercial services, steadied completely last month to +3.2% year-on-year after rising 0.5% in April.
The Department of Labor announced that the number of initial unemployment insurance claims in the United States rose to 242,000 in the week ending June 3, up 13,000 from the previous week.
The four-week moving average, which better represents underlying trends, was 227,000, up 4,750 from the previous week.
However, these “encouraging” numbers were marred by comments from Jerome Powell, which dampened investor expectations of monetary easing.
The officials' new interest rate projections – the famous “dot plots” – show just one rate cut in 2024, compared with three cuts so far.
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