The New York Stock Exchange ended higher on Thursday, still supported by Donald Trump’s electoral victory but also by the prospect of further rate cuts from the American central bank (Fed).
Nasdaq index (+1.51%) and broader S&P 500 index (+0.74%) both set new closing records, while the Dow Jones finished in balance.
“Stocks remain driven by the resilience of the (American) economy and the hope of a growth policy, tax cuts, all things which would benefit corporate profits”commented Angelo Kourkafas of Edward Jones.
Donald Trump’s success in the presidential election is thus associated with an accommodating tax policy and proactive deregulation to create the conditions for economic growth.
Added to this climate which had already whipped Wall Street on Wednesday was the Fed’s decision to lower its key rate by a quarter of a percentage point, to a range between 4.50% and 4.75%.
During his press conference, the president of the institution, Jerome Powell, insisted that the members of the Fed remained open to any possibility concerning the next meeting, on December 17 and 18.
However, “we have confirmation that the Fed remains on the path to monetary easing”and pointed out by Angelo Kourkafas.
The bond market took note and the yield on 2-year US government bonds eased to 4.20%, compared to 4.26% the day before at the close.
Technology stocks benefited from the combination of the election of Donald Trump and the Fed’s rate cut.
Semiconductor champion Nvidia (+2.25%) has thus consolidated its place as the world’s largest capitalization, ahead of Apple. Its valuation rose to $3,652 billion, an absolute record for a listed company.
Its competitors Intel (+4.71%), AMD (+3.25%) and Broadcom (+2.37%) also galloped away.
British chip designer Arm Holdings was invited to the party (+4.13%), although it published sales forecasts considered disappointing for the current quarter.
Also a beneficiary of the Republican candidate’s victory, Tesla remained on its path (+2.90%). The stock, however, remains quite far from its peaks reached at the end of 2021. Tesla boss Elon Musk was a key funder of the Trump campaign.
Conversely, the Dow Jones residents who had the wedding on Wednesday had a hangover. Financials have declined, like Goldman Sachs (-2.32%), American Express -(2.83%) or JPMorgan Chase (-4.32%), as well as the industrial conglomerate 3M (-0 .63%).
Donald Trump’s media group, Trump Media and Technology Group (TMTG), also suffered a brutal backlash (-22.97%). The title is very popular with speculators and prone to violent variations from one day to the next.
The chauffeur-driven passenger vehicle (VTC) reservation platform Lyft performed well (+22.85%), thanks to results above expectations and an increase in its annual margin objective.
The stock benefits from an attractive valuation, after a chaotic run this year.
The Warner Bros Discovery media group also climbed (+11.81%) despite falling turnover and lower than analysts’ projections.
Investors preferred to retain the net gain of 7.2 million subscribers to the Max streaming platform compared to the previous quarter.
The New York market is generally satisfied with this vintage of results, more than three-quarters of S&P 500 members having published their quarterly accounts.
“I wouldn’t say it was an exceptional season, because the bar was high, but we had positive comments on consumption and on AI (artificial intelligence), which remains a catalyst”summarized Angelo Kourkafas.
