Wall Street cumulates 12 positive sessions before the Fed

The New York Stock Exchange concluded its twelfth consecutive session in the green on Tuesday, at the heart of the earnings season, while the market has already taken into account a very likely rate hike by the Fed on Wednesday.

The Dow Jones index climbed 0.08% to 35,438.07 points. Just before the publication of the results of Microsoft and Alphabet, the Nasdaq climbed 0.61% to 14,144.56 points. The broader S&P 500 index gained 0.28% to 4,567.46 points.

“That’s another good session! Obviously, it’s all about company results,” commented Peter Cardillo of Spartan Capital.

“The market continues on its upward slope, we are approaching the record number of consecutive positive sessions which is 13”, he underlined.

Conglomerate General Electric (GE) jumped 6.27% to $117.16.

Driven by activity in aeronautics in the second quarter in a context of post-pandemic air traffic recovery, GE published quarterly results that beat expectations and revised its outlook for 2023 upwards.

The chemical and diversified group 3M, which produces medical equipment as well as adhesive rolls, abrasive products and post-its, saw its stock climb by 5.34%.

Excluding the exceptional charge of the fine of 10.3 billion dollars linked to eternal pollutants, the group’s quarterly results were better than expected, even if turnover fell. 3M also raised its annual earnings per share projections.

Raytheon (RTX) accused him of a severe dive, the action dropping 10.22% to 87.10 dollars, one of the biggest falls since the attacks of 2001.

The defense and aeronautics group will recall the Pratt and Whitney engines of certain Airbus A320Neo because of a risk of premature wear of a metal part.

This problem forces Pratt, an RTX subsidiary, to check hundreds of engines manufactured between 2015 and 2021 in the next nine to twelve months.

“Stocks in the artificial intelligence (AI) universe have been sought after,” pending Microsoft and Alphabet, said Steve Sosnick of Interactive Brokers.

Meta, which reports its results on Wednesday, climbed 0.98%, graphics card maker Nvidia 2.39%.

“A lot of enthusiasm has crept into these actions while waiting for the big results announcements,” he added.

Microsoft, which rose 1.70% on Tuesday, lost as much in post-closing electronic trading. The software giant published better-than-expected results but a slowdown in its flagship “cloud” (remote computing) sector. Alphabet (Google) jumped 6% to 130 dollars after the closing and the announcement of revenues and profits exceeding expectations.

The express carrier UPS has reached a salary increase agreement with the drivers, avoiding the risk of a strike at the first American parcel delivery company.

The action, however, fell 1.94% to 184.69 dollars. “They are avoiding a potentially damaging strike but their costs will increase,” commented Steve Sosnick.

In terms of macro-economic news, the Conference Board’s consumer confidence index was robust in July in the United States, reaching a two-year high of 117 points.

On Wednesday, all eyes will be on the US Central Bank (Fed).

“The market is already pricing in a 25 basis point rate hike and a very ‘hawkish’ statement,” that is to say strict, according to Peter Cardillo.

“He will reiterate that the fight against inflation is not over,” added the analyst. This new increase would bring interest rates to between 5.25% and 5.55%.

On the bond market, the ten-year rate remained virtually stable at 3.88%.

At the end of the session, the securities of the regional banks Bank of California and PacWest were suspended while press reports mentioned a takeover of Pacwest by Bank of California, confirmed in a press release after the market closed.

The regional lender PacWest, which was closely watched and heckled after the banking crisis which saw the bankruptcy of Silicon Valley Bank, fell 27% to 7.69 dollars before being suspended from trading.