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Wall Street seduced by the thesis of the soft landing of the economy



(New York) The New York Stock Exchange opened higher on Monday, now ready to believe in the scenario of a soft landing for the US economy, based on the latest macroeconomic indicators.

Around 10:10 a.m. (Eastern time), the Dow Jones gained 0.39%, the NASDAQ index appreciated 1.57% and the broader S&P 500 index gained 0.87%.

For Patrick O’Hare, of, “the hope persists” of a deceleration of the American economy which deteriorates only moderately the employment market and the results of companies.

The momentum was boosted on Friday by the monthly jobs report, which showed a slowdown in wage growth, followed by the ISM index, which said activity in services contracted in December. , a first since May 2020.

“The US economy appears to be heading for a soft rather than a hard landing,” said Adam Sarhan of 50 Park Investments.

“The values ​​of real estate, insurance and retail trade are accelerating”, underlines the manager. “You don’t see that when the economy is heading for a shipwreck. »

On the odds, the real estate investment company American Homes 4 Rent was indeed in the green (+0.71%), as was the insurer AIG (+0.38%), close to its highest level since April 2022.

As for the ready-to-wear brand Abercrombie & Fitch (+4.37% to 26.30 dollars), it jumped after announcing on Monday the upward revision of its forecasts. The chain is now expecting a growing turnover in the last quarter of 2022, against a contraction previously, and expects larger margins than expected.

If it will have to be confirmed by the CPI price index for December, expected on Thursday, the ebb of inflation, combined with indicators which testify to an economy at a slower growth rate, accredits, for operators, the hypothesis of a lull on the monetary tightening front.

“They’re still stepping on the accelerator, but they’ve eased off a lot,” says Adam Sarhan of the Fed, which is positive for equity markets.

“If (Wall Street) manages to end the week up, it will open the way up,” anticipates the manager.

Some were doing well, but other retail names were suffering from the slowdown in the US economy, such as sports equipment manufacturer Lululemon Athletica (-9.39% to $298.35), which revised downwards its forecasts for sales and profits for the fourth quarter of 2022 on Monday.

The department store chain Macy’s (-7.34% to 20.50 dollars) has narrowed down the range of its sales forecasts for the last quarter of last year.

The prospect of a Fed that was less aggressive than expected boosted the technology sector, which suffered quite a bit in 2022 with the forced rise in rates.

Amazon (+3.03%), Apple (+1.99%), Alphabet (+2.21%) and semiconductor manufacturers AMD (+7.29%) and Texas Instruments (+2.10%) ) were thus sought. Tesla was at the forefront, after a calamitous journey in recent months.

Casino operators MGM Resorts (+2.31%), Wynn Resorts (+2.12%) and Las Vegas Sands (+1.76%) advanced, while Macau authorities relaxed restrictions on the entry of tourists.

The American biotech CinCor Pharma soared (+136.79% to 27.89 dollars) after the announcement of its takeover by the British AstraZeneca, which values ​​the group at 1.8 billion dollars.

Pfizer fell (-2.45% to 49.67 dollars) after the Supreme Court rejected an appeal by the pharmaceutical company, which proposed to cover part of the remainder to be paid by the beneficiaries of its very expensive treatment against cardiomyopathy (weakening of the heart muscle).

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