Wall Street turns around and returns to green as it continues to recalibrate the Fed’s future hike

Wall Street turns around and returns to green as it continues to recalibrate the Fed’s future hike
Mixed sign on Wall Street: Advances for the Dow after the weekly stoppage and retail sales

The DOW-JONESwhich opened with a decrease of 0.22%, rose by mid-morning by 0.26% to 31,217 points, while the S&P 500 advances 0.21% to mark 3,954 points. The NASDAQ100for its part, rose a slight 0.10% to 11,730 points, after having opened with falls of more than half a point.

Wall Street is coming off a choppy session yesterday in which the major indices posted modest gains. The Dow finally closed with a rise of 30 points, after falling more than 200 points at some points in the day. The S&P 500 rose 0.3% and the Nasdaq Composite advanced 0.7%.

Investors are looking for some stability after the inflation data on Tuesday ended up leading to the worst day on the floor since June 2020. The consumer price index (CPI) report for August showed that headline inflation rose by 0, 1% on a monthly basis, when the market had anticipated a drop.

“One-day events are difficult to extrapolate,” explains Jeff deGraaf, founder and president of Renaissance Macro Research, speaking to CNBC. “It’s one of those extreme events that doesn’t get tracked and that tends to be good news, not bad.” For this expert, โ€œinflation is really a dark cloud over equities, but I think it is really important that people keep in mind that it is not about the good and the bad in the markets, but about the best and the worst; and yes, it seems that inflation is improvingโ€.

All eyes are on next week’s Federal Reserve meeting. Until now the market had almost taken for granted a rise in interest rates of 75 basis points, but after the inflation report on the table there seems to be an even more aggressive move of 100 points.

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Today investors have also had a good handful of macro references in which to try to scrutinize the Fed’s intentions. Among them, the initial applications for unemployment benefits that fell for the fifth consecutive week to a figure of 213,000 applications, minimum of three months. While, retail sales were stronger than expected, rising 0.3% in August which is compared to the fall of 0.1% that the market had predicted.

The market is also attentive to the threat of a strike in the railway sector, which could paralyze an important segment of the country’s transport network. President Joe Biden has stepped up to prevent this strike, with an initial labor agreement that would improve wages and working conditions for rail workers and give them “peace of mind about health care costs.”

The new contracts will provide railroad employees with a 24% salary increase over the five-year period from 2020 to 2024, including an immediate median pay of $11,000 upon ratification, according to the Association of American Railroads. All interim agreements are subject to ratification by union members.

Adobe collapses on the stock market after announcing the purchase of Figma for 20,000 million

In the business field, Adobe is one of the values โ€‹โ€‹to follow of the day after announcing that it will acquire the software company Figma after reaching an agreement for some 20,000 million dollars in cash and shares. Founded in 2012, Figma has cloud-based design software that allows teams to collaborate in real time. In other words, it competes head to head with Adobe’s XD program.

“Adobe’s greatness has been rooted in our ability to create new categories and deliver cutting-edge technologies through organic innovation and inorganic acquisitions,” said Shantanu Narayen, president and CEO of Adobe. “The combination of Adobe and Figma is transformative and will accelerate our vision of collaborative creativity.” Adobe shares fall more than 9%.

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Among other leading companies in the market, Pfizer has announced the start of clinical trials of a new flu vaccine based on mRNA technology. Specifically, together with BionTech, the advanced phase III trial begins with 25,000 patients who receive a dose of this vaccine candidate. Each year in the US, between 140,000 and 710,000 people are hospitalized from the common flu and between 12,000 and 52,000 people die. mDNA technology makes it possible for the annual modifications required by influenza vaccines to adapt to mutations in the virus to be made in substantially less time than vaccines using traditional technologies.

On the other hand, the EMA advisory committee has recommended approving its booster dose of the anti-Covid vaccine adapted to the Omicron BA.4/BA.5 variants for people over 12 years of age.

The actions of Netflix are up more than 2% in pre-open after analysts at Evercore ISI upgraded advice on the streaming giant, saying the company’s new level of ad-supported subscribers may give the company a much-needed boost.

We believe that these opportunities, especially the ad-supported service, constitute Growth Curve Initiatives (GCIs) – catalysts that can drive a material reacceleration in revenue growth. โ€œWe do not believe these opportunities are factored into Street’s current estimates or NFLX’s current valuation. Hence the improvement.”

Meanwhile, Credit Suisse has upgraded the casino operator’s recommendation Wynn Resorts from ‘neutral’ to ‘overweight’. The Swiss bank sees Wynn as one of the most compelling stories in the gaming industry. Their shares rise 2.5%.

In the fixed income markets, the yield on the two-year bond has touched 3.83% again today after this week it has reached its highest since November 2007. The yield on the ten-year bond stands at 3.439 %, while the two-year bond offers a return of 3.46%.

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Meanwhile, oil prices are falling again once the prospects for an agreement in the rail sector have allayed fears about a disruption in fuel supply, given the importance of rail infrastructure for the sector in the US. What does persist are fears on the demand side, given the prospect of a recession due to rate hikes. US West Texas crude fell 0.61% to $87.94 a barrel. The oil futures Benchmark Brent in Europe fell 0.71% to $93.39 a barrel.

The dollar rose 0.08% against the euro to establish the currency cross at 0.9975 dollars for each euro. Gold falls to 1,686 dollars an ounce, while the Bitcoin remains above $20,000.

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