Instant view: Powell green lights September rate cut
August 23, 2024
Linea Mercati Interview 8/23/24
August 26, 2024New York (awp/afp) – The New York Stock Exchange was rising shortly after opening on Friday, reacting positively to the start of the highly anticipated speech by the chairman of the American central bank (Fed) Jerome Powell.
Around 2:15 p.m., the Dow Jones gained 0.98%, the Nasdaq index gained 1.64% and the broader S&P 500 index gained 1.18%.
At the end of a week poor in indicators and results, operators were waiting for Jerome Powell’s speech, which began around 2:00 p.m. GMT, on the occasion of the Jackson Hole (Wyoming) symposium, which brings together many central bankers from around the world.
The Fed chairman considered that the “time (had) come” for a first rate cut.
Bond rates reacted immediately, with the yield on 10-year US government bonds falling to 3.79%, compared to 3.85% the previous day at the close.
“The market is going to be attentive to what he says, how he says it, and whether he gives an indication that the rate cut could be more than a quarter of a point”, the standard format for revisions by central banks, added the analyst.
Thanks to an activity indicator above expectations, operators have moderated their expectations of an offensive move by the Fed, the US economy showing signs of resilience.
If Jerome Powell opts for caution “it could be negative for the market”, warns Peter Cardillo.
On the stock market, the semiconductor sector took the Nasdaq with it, recovering after a difficult session on Thursday. Nvidia (+3.60%), Broadcom (+2.77%) and Qualcomm (+2.98%) thus benefited from a hunt for bargains.
The days follow one another and are not alike for Paramount Global, in the red (0.98%). According to the Wall Street Journal, the Skydance studio has challenged the media group’s ability to extend the period during which offers other than its own can be submitted to Paramount’s board of directors.
Businessman Edgar Bronfman Jr. made a first proposal, which he noted only a few hours later, this week, according to several American media outlets.
The railway company Canadian National Railway (CN) appreciated (+1.49%) after the Canadian government ordered the opening of an arbitration procedure between CN and the Teamsters Canada Rail Conference union to reach a company agreement.
CN had suspended its operations in Canada on Thursday due to the lack of an agreement, a blockage that threatened to disrupt the transport of goods in North America.
On the other hand, the same union refused to return to work at Canadian Pacific Kansas City (+1.67%), contesting the legitimacy of the government’s decision.
Mediterranean-inspired fast food chain Cava jumped (+15.29%) after beating expectations for its second fiscal quarter and raising its annual targets.
Since its IPO in June 2023, Cava’s market capitalization has doubled to more than $11 billion, and the group now has more than 300 branches.
Moderna capitalized (+0.31%) on the marketing authorization, for those over 60, by the European Medicines Agency of its vaccine against respiratory syncytial virus (RSV), which causes bronchiolitis.
The ready-to-wear chain Gap was parading (+2.23%), while its symbol on the New York Stock Exchange was changed from GPS to GAP, 48 years after its first listing.
