Wall St muted as hot PPI keeps smaller rate cut in view; Moderna slumps
September 12, 2024
Linea Mercati Interview 9/12/24
September 13, 2024New York (awp/afp) – The New York Stock Exchange was slightly down on Thursday shortly after opening, due to a lack of a catalyst, already focused on the meeting of the American central bank (Fed) next week.
Around 13:50 GMT, the Dow Jones, the Nasdaq index and the broader S&P 500 index were each down 0.30%.
Wall Street gave a lukewarm reception to the two indicators of the day in the United States.
The producer price index (PPI) came out above expectations, at 0.2% in August against 0.1% projected by economists.
Excluding energy and food, the PPI also came in higher than expected, as did the consumer price index (CPI) the day before.
“This slight acceleration will not dissuade the Fed from lowering its rates in September, but it also does not argue for a more marked reduction in response to a surge in inflation,” commented economists at High Frequency Economics in a note.
As for new jobless claims, they remained in the range observed for a month, “suggesting,” according to Jeffrey Roach, an analyst at LPL Financial, that “the labor market is slowing but not collapsing.”
Lacking any significant news, the New York stock market thus went back and forth between red and green several times during the first minutes of the session.
After three positive sessions in a row for the S&P 500 this week, the trend remains upward, according to Peter Cardillo, an analyst at Spartan Capital.
“The market should oscillate” in a tight range in the coming sessions, according to him, “with an upward bias, as we approach the decision of the Fed’s monetary policy committee next week”.
Operators now give an 87% probability to the hypothesis of a quarter-percentage-point cut in the Fed’s key rate on Wednesday, after the meeting.
On the bond market, rates tightened somewhat. The yield on 10-year US government bonds rose to 3.67% against 3.65% the day before at the close.
For Peter Cardillo, this strengthening was explained in particular by the prospect of an auction of 30-year Treasury bonds, for 22 billion dollars.
On the stock market, the wind was blowing behind the Kroger supermarket chain (+3.72%), thanks to a profit above expectations and the increase in its sales forecast range for the entire financial year.
CEO Rodney McMullen reaffirmed Kroger’s desire to buy its competitor Albertsons, a transaction that was contested by the American Competition Authority (FTC) and which is currently being examined by the courts.
The pharmaceutical group Moderna stumbled (-18.48%), with operators reacting badly to the 20% downward revision of research and development budgets planned for the period 2025-2028.
The semiconductor designer Micron (-6.08%) suffered the backlash from a recommendation downgrade by Exane BNP Paribas, which sees the group suffering from competition from other major players in the sector.
The airline Alaska Airlines (-0.46%) did not benefit from the significant increase in its forecasts, thanks to higher than expected attendance and the decline in kerosene prices.
A reaction to be put into perspective given the trajectory of the stock, which had gained more than 22% in one month.
The petrochemical group Dow (-2.21%) lowered its forecasts, due to a problem that occurred in July on a cracking site (transformation of oil or gas into ethylene).
