The New York Stock Exchange does not wait for the Fed and opens higher

The New York Stock Exchange opened on Wednesday higher in hopes that the market has already priced most of what the US central bank (Fed) will reveal later in the day, which is expected to significantly increase its key benchmark rate.

Around 14:00 GMT, the Dow Jones gained 0.56%, the Nasdaq index, with a strong tech composition, took 0.32%, and the broader S&P 500 index advanced 0.56% .

This green start reflected “an attitude tinged with hope prior to the Fed’s decision, with the belief that the market has already discounted the will (of the US central bank) to restore its credibility in the fight against inflation.” Patrick O’Hare of Briefing.com.

“From the speech [du président de la Fed Jerome] Powell in Jackson Hole, “in late August,” the market is afraid to anticipate today’s meeting, “recalls Gregori Volokhine, of Meeschaert Financial Services.

The S&P 500 therefore fell by nearly 8% and the Nasdaq by nearly 10%, in less than a month. For the manager, more than the rate decision itself, which the consensus sees to rise by 0.75 percentage points, investors will mainly follow the projections for the next few months and the tone of Jerome Powell’s speech.

“If the Fed shows that rates are still restrictive in 2025, ie above 3%, market participants will tear their hair out, because it will take away what fueled the market rally in July, the hope that the Fed will cut. the rates ” in a short time, explains the manager.“The Fed will tell us how aggressive they are still and for how long”Gregori Volokhin anticipates.

Wall Street also benefited from the stabilization of bond rates, the recent sharp rise of which froze traders and put a little more pressure on equity markets. The yield on 10-year US government bonds even contracted slightly, to 3.53%, from 3.56% the day before. The 2-year rate, closely followed in recent days, remained unchanged at 3.96%.

Obsessed with the Fed, the New York market reacted little to statements by Russian President Vladimir Putin, who announced the partial mobilization of reservists and threatened to use nuclear weapons.

However, this development benefited the values ​​of the defense sector, in particular Lockheed-Martin (+ 2.13%), Northrop Grumman (+ 3.01%) and General Dynamics (+ 2.34%).

Wall Street welcomed the good surprise of the agri-food giant General Mills (+ 5.81% to 79.79 dollars), which published a net profit higher than expected and raised the forecasts for the entire staggered financial year 2023, which it will conclude at the end of May.

“It is good that there are companies that are a little against it”Gregori Volokhine responded, after FedEx profit notices on Thursday and Ford on Monday.

The Coty cosmetics group is also sought after (+ 5.33% at $ 8.20) after unveiling its strategic plan that foresees the doubling of sales of skincare products by 2025. In the short term, the New York company has raised the target revenue growth for the first quarter of its staggered fiscal year 2023, ending in late September. In the same industry, Estée Lauder is riding a Goldman Sachs recommendation upgrade, which sees the group’s sales accelerate after the pandemic.

The listed vehicle Digital World Acquisition Corp (DWAC), which is about to merge with Donald Trump’s media company, fell sharply (-4.90% to $ 17.70). According to the Financial Times, negotiations are underway to avoid the withdrawal of several investment funds that had pledged to contribute about one billion dollars to the deal.

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