Wall Street in disarray, fragile hope for turnaround

Just after 4 p.m., the Dow Jones was up 0.83% and the broader S&P 500 Index was up 0.33%, while the Nasdaq was down 0.33%.

The New York Stock Exchange opened higher on Monday, aiming to confirm the technical recovery at the end of Friday’s session, at the start of a week of releases and indicators.

At around 14:05 GMT, the Dow Jones was up 0.83% and the broader S&P 500 index was up 0.33%, but the Nasdaq index, which has a strong technology composition, was down 0.33%.

“It looks like we’re headed for a rebound,” commented Peter Cardillo of Spartan Capital Securities.

The first explanation for this inflection, he says, comes from the market’s reaction after the S&P 500 index fell below the symbolic 20% mark from its peak on Friday.

Thus briefly in the “bear market”, meaning it is beyond simple correction, the New York market’s most representative index has regained altitude by the end of the session.

“The bear has returned to hibernation,” summarized Patrick O’Hare in a note for which month-end could fuel momentum through portfolio adjustments.

For Peter Cardillo, the cautious optimism blowing into the market was also due to US President Joe Biden’s announcement that he would launch a new economic partnership in the Asia-Pacific region.

Final card from supporters of a positive session, according to Patrick O’Hare, is some seething in the M&A market.

Remote computing (cloud) specialist VMware’s stock soared (+17.08% to $112.16), helped by news reports reporting advanced talks for a takeover by semiconductor maker Broadcom, which was, however, teased ( -4.73% to $517.52). .

Electronic Arts was up (2.47% to $133.99), helped by information from Puck’s website that the video game publisher had recently held talks with several potential buyers, including Disney and Apple.

The week, like the previous one, should update on the health of retail, while many investors fear an economic slowdown or even a recession in 2023.

After Walmart and Target, which had alarmed Wall Street with their margins and disappointing outlook, Best Buy and Nordstrom are expected on Tuesday, and Gap and Macy’s on Thursday.

Gap was sanctioned ahead of its release (-7.32% to $10.13) after lowering its recommendation from Citi analysts, who believe the ready-to-wear brand will suffer from inflation along with department store chain Kohl’s (-1.43% to $38.64).

“The market is still fragile,” Peter Cardillo warned of these upcoming releases, “but I think what we saw on Friday suggests we’re probably over the worst of Wall Street’s decline, the beginning of the… year has begun.

At the macroeconomic level, a number of indicators should also help operators see the evolution of the economy more clearly.

May Manufacturing and Services PMIs are followed by Tuesday’s Durable Goods Orders, Wednesday’s PCE Inflation Index, closely followed by the US Federal Reserve (Fed), Thursday’s Consumer Confidence Index (University of Michigan) , Friday.

JPMorgan was searched (3.48% at $121.52) after the bank said in a presentation published Monday that it expects to hit a key target for return on assets in 2022, after warning earlier this year that that she would probably miss it.

The group took the entire banking sector with it, from Citigroup (+3.44%) to Wells Fargo (+3.10%) via Bank of America (+4.09%).

Food group JM Smucker fell (-17.18% to $108.29) after the massive recall of many references of its Jif peanut butter following possible salmonella contamination.

After several weeks of severe upheaval, the bond market stabilized. The US 10-year Treasury yield edged up to 2.80% from 2.78% on Friday.

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