This Friday, the main indices are expected to recover on Wall Street, but once again in a scattered order. The Dow Jones and the S&P are expected to rise slightly while the Nasdaq is expected to extend its decline.
Yesterday, the American market had already ended the session in a scattered order. The S&P 500 fell by -0.88% (5,584 pts). The Dow Jones remained relatively stable, with a gain of +0.08% (39,753 pts). On the other hand, after several records swallowed one after the other and 7 consecutive sessions of increases, the Nasdaq gave back -1.95% to 18,283 pts.
Inflation data points to economic slowdown, opening door for possible interest rate cuts by the Federal Reserve. With the data suggesting a sharper-than-expected deceleration in inflation, June CPI data reinforced expectations for a first Fed rate cut in September.
The core CPI, which excludes food and energy prices, rose 0.1% sequentially, its smallest gain since August 2021, according to Labor Department figures. Headline annual inflation rose +3.3%, the slowest pace in more than three years. Sequentially, consumer prices fell -0.1% in June, the first decline since the pandemic…
These figures have reinforced investors’ expectations of rate cuts by the Fed, and the scenario of a soft landing for the economy, expected by the Federal Reserve. Several Fed officials have, however, indicated that more evidence of a slowdown in inflation is needed before considering rate cuts. This verbal caution from the institution’s leaders still invites stakeholders to be a little cautious so as not to rush beyond the historical records already broken.
Wall Street will rely today on two macroeconomic publications: the American Producer Price Index (2:30 p.m.) and the preliminary index of American consumer sentiment measured by the University of Michigan (4 p.m.).
Also expected today are reports from Bank of New York Mellon, Citigroup, Wells Fargo, and JP Morgan Chase.
The dollar remains under pressure and is trading at 0.9187 euros.
The barrel of Brent recovered by +0.61% to $83.46. Brent climbed by +0.42% to $85.97.
Gold is trading at $2,397 per ounce. Bitcoin is once again showing signs of weakness, falling 0.5% to $57,229.
Values
* JPMorgan Chase. The financial institution reported a quarterly profit of $18.15 billion ($14.47 billion a year ago), driven by higher investment banking expenses and an $8 billion accounting gain from a stock-swap deal with Visa.
* Wells Fargo. The American bank’s second-quarter profit fell to $4.91 billion (from $4.94 billion a year earlier), due in particular to the increase in the cost of deposits in a context of strong competition.
* Bank of New York Mellon. Net income rose 10% in the second quarter. Higher investment services fees more than offset lower interest income.
* KKR. German media giant Axel Springer, which owns the Bild tabloid and the Politico news site, is considering a spin-off of the company. The U.S. private equity group would take control of the classifieds business, two people familiar with the matter told Reuters.
* Tesla. Elon Musk’s company is likely to be under further pressure after already falling 8.4% yesterday. UBS has lowered its recommendation from ‘neutral’ to ‘sell’.
