Wall Street ended this Tuesday close to its peaks, but in a scattered order. The S&P 500 progressed timidly by +0.07% to 5,576 pts after a new high of 5,590.75 pts during the session. The Dow Jones gave back -0.13% to 39,291 pts. Stringing together a 6th consecutive session of increase, the Nasdaq took another +0.14%, to 18,429 pts, after having also signed during the day, a new historical record at 18,511.89 pts.
In remarks prepared for his testimony before the Senate Banking Committee, Jerome Powell said the economy has made substantial progress toward the Federal Reserve’s 2 percent inflation target, while labor market conditions have cooled but remained strong. “Given these developments, the risks to achieving our employment and inflation goals are becoming more balanced,” the Fed Chairman said.
But the leader intends to give time a chance, estimating: “More reliable data would strengthen our confidence in the sustainable evolution of inflation towards 2%. We continue to make decisions meeting by meeting.” He specified that a reduction in interest rates that is too small or too late could endanger the economy and the labor market. Conversely, a reduction in rates that is too rapid or too significant could block or reverse the progression of inflation.
Ian Lyngen of BMO Capital Markets told Bloomberg: “The tone of Powell’s prepared remarks is consistent with the recent emphasis on the employment component of the Fed’s dual mandate. While we don’t interpret this as an insinuation that July could potentially see a cut, it certainly leaves September on the table.”
Stephen Brown at Capital Economics says Powell is keeping all options open. “The neutral tone of the opening statement seems at odds with the softer tone of recent activity data, so we feel a September rate cut remains very much on the cards. The Fed is looking for more good data to bolster that confidence, a deliberately vague term that keeps all options open. We continue to expect two 25-basis-point rate cuts this year, in September and December.”
According to the Fedwatch barometer, more than 75% of investors are now expecting a quarter-point cut in interest rates in September.
On the oil side, the barrel of WTI crude fell by -0.51% to $81.82.
The dollar is relatively stable against the euro, trading at 0.9242 euros.
Gold is down -1.16% at $2,363 per ounce. Bitcoin is up +1.06% and is back at $58,394.
Values
* Eli Lilly (+1.71% to $933.34). The publication of a data analysis shows that the American group’s treatment against obesity, Mounjaro, leads to faster and more significant weight loss than that of its competitor Novo Nordisk.
* JP Morgan (+1.2% to $207.63). The US Federal Reserve is considering changing the rules for calculating systemic overload applied to the country’s eight largest banks, allowing them to save billions of dollars in capital.
* Johnson & Johnson (+1.08% to $147.05). The American group Emergent BioSolutions said that Johnson & Johnson has agreed to pay $50 million to settle claims related to the end of a manufacturing contract for its Covid-19 vaccine.
* KKR & Co (+0.51% to $105.6). The private equity firm is considering selling half of its 43% stake in Japanese semiconductor equipment maker Kokusai Electric, according to two people familiar with the matter cited by ‘Reuters’.
* Boeing (-1.4% to $183.24). A United Airlines plane lost a landing gear wheel Monday while taking off from Los Angeles, but landed safely in Denver, its intended destination. The wheel from the Boeing 757-200 on United Flight 1001 was recovered in the California city. No one was reported injured, an airline spokesman said.
On Monday, the Federal Aviation Administration also ordered inspections of 2,600 Boeing 737s because passenger oxygen masks may not work in an emergency. There have been several reports of oxygen generators moving around, a problem that could result in the inability to deliver oxygen to passengers if the plane loses pressure. Boeing issued a notice on June 17 asking airlines to conduct visual inspections, according to the FAA.
* Pfizer (-0.75% to $27.72). The pharmaceutical group announced that its scientific director, Mikael Dolsten, who played a key role in the development of the group’s vaccine against Covid-19, will leave his position after more than 15 years of career within the laboratory.
