Wall Street in disarray, a new inflation indicator calms minds

The New York Stock Exchange moved in disorganized order on Thursday, shortly after the opening, calmed by a new inflation indicator, lower than expected, and which counterbalanced the unpleasant surprise of Wednesday, before the start of the results season.

Around 3:50 p.m. GMT, the Dow Jones fell by 0.22%, the Nasdaq index advanced by 0.35% and the broader S&P 500 index was close to balance (-0.01%).

“We are entitled to a little rebound”, after the decline of the day before, observed Peter Cardillo, of Spartan Capital. “We owe this to wholesale prices, which have increased less than expected.”

The PPI producer price index rose 0.2% month-on-month in March, less than the 0.3% expected by economists.

“This report is a relief for economists and investors,” commented Sam Millette of Commonwealth Financial Network in a note.

“This makes up for yesterday’s scare with (the price index) CPI”, which came out higher than expected, because the PPI is considered a leading indicator of inflation, with producer prices being transmitted, in a second time, to retail.

The publication led to a slight easing in the bond market. The yield on 2-year US government bonds fell to 4.93%, compared to 4.97% the day before, after briefly crossing the psychological threshold of 5%, a first in almost five months.

However, over one year, the PPI producer price index shows an increase of 2.1%, the highest in almost a year (April 2023).

“These data show an acceleration over one year, and if we add them to the resistant CPI, justify a patient approach to monetary policy,” reacted, in a note, Rubeela Farooqi, of High Frequency Economics.

After opening in the green, the Dow Jones quickly went negative.

It owes this in particular to Boeing (-1.39%), which is flirting with its lowest price in 16 months.

The aircraft manufacturer is still weighed down by the accusations of an engineer who accuses the manufacturer of having taken liberties with safety requirements during the assembly of 787 Dreamliner and 777 aircraft.

The New York market is already looking ahead to earnings season, which begins Friday with a slew of financials, including JPMorgan Chase, Wells Fargo and Citigroup.

Elsewhere on the stock market, alcoholic drinks giant Constellation Brands (+1.59) capitalized on results above expectations, driven by growth in beer sales, which more than offset the decline in wine and spirits.

Nike set off in a sprint (+2.61%), driven by a favorable note from Bank of America, which sees the sports equipment manufacturer benefiting from an Olympic Games effect and savings measures.

The Regeneron laboratory fell (-2.65%), undermined by a summons from the Ministry of Justice, which attacked the biotech in civil justice, accusing it of having inflated the prices of its Eylea treatment against macular degeneration age-related (AMD).

Still in the medical sector, the start-up Alpine Immune Sciences (+36.64%), which is notably developing a treatment against renal nephropathy, jumped after the announcement of its takeover by the Vertex laboratory (+1.48%) , for 4.9 billion dollars.