Wall Street resists and ends in the green despite the rise in bond rates

The New York Stock Exchange ended in the green on Wednesday resisting well to the strong retail sales in January in the United States, which could encourage the Fed to raise rates further.

The Dow Jones index gained 0.11% to 34,128.05 points, the tech-heavy Nasdaq climbed 0.92% to 12,070.59 points and the broader S&P 500 index gained 0.28% to 4,147.60 points.

The good performance of the equity market despite the tension in the bond market in reaction to the unexpected jump in retail sales “does not have a very clear explanation”, acknowledged Karl Haeling of LBBW.

Same perplexity from Peter Cardillo of Spartan Capital: “despite the strong macroeconomic news and the rise in bond yields, the market remains convinced that the Fed is not going to be too aggressive and that the end of the rate hike cycle is in sight. “,

Retail sales last month, which account for a good share of U.S. consumption, driving the economy, posted their strongest gain in nearly two years, climbing 3%, the index showed Wednesday. Analysts were forecasting a much lower 1.9% rise.

At first, the stock market reacted with concern and the indices lost ground, the consumer’s drive worrying investors because, by its dynamism, “the economy seems impervious to the Fed” and its rate hikes to lower inflation.

The indices, led by the Nasdaq, then rebounded, deciding, for once, “to take good news for good news”, commented Art Hogan of B. Riley Wealth Management.

“It’s as if the soft landing scenario is fading away,” noted Peter Cardillo.

Same interpretation for Karl Haeling of LBBW who observed that “if the Fed must tighten rates more, it could do so in the face of a stronger economy, and (…) then we could not have a recession at all”.

Bond yields have risen sharply, with ten-year yields climbing to 3.80% around 9:15 p.m. GMT, the highest for the start of the year, while two-year yields settled at their highest in three months. .

“It seems that the stock market and the bond market are saying the opposite. It makes you think that there is one who is wrong,” summed up Art Hogan.

The trajectory of the Dow Jones was moderated by the energy sector, the only one with that of health products, to conclude in the red.

The Devon Energy group, which specializes in the exploitation and transport of hydrocarbons, disappointed investors with its results in the 4th quarter but also with the scale of its investment projections. Devon Energy shares were the bottom of the market, falling 10.49%.

The Nasdaq led the dance with the flight of Airbnb (+13.35% to 137 dollars). The housing rental platform announced much better than expected results, which enabled it to post its first year of profitability.

Investors also found a taste for DoorDash (+10.66%), Lyft (+6.88%) and even the manufacturer of interactive exercise bikes Peloton (+5.53%).

The video game platform Roblox had the wind in its sails, flying more than 26.38% to 45.08 dollars. Player bookings in the fourth quarter far exceeded expectations.

While bitcoin rose sharply, gaining 8.40% to 24.122 dollars around 9:40 p.m. GMT, the Coinbase cryptocurrency trading platform jumped on the stock market by 17.47%.