Wall Street in dispersed order, caution before a busy week

The New York Stock Exchange moved in dispersed order Monday shortly after the opening, at the start of a decisive week which promises to be loaded with corporate results as well as central bank announcements.

Around 2:05 p.m. GMT, the Dow Jones rose by 0.45%, the Nasdaq index yielded 0.16% and the broader S&P 500 index gained 0.23%.

The Dow Jones remains on ten consecutive positive sessions, a first for nearly six years. The absolute record, 14, dates back to the spring of 1897.

“This is an extremely important week with central bank meetings including the Fed (Federal Reserve) and major results including Microsoft and Meta,” said Quincy Krosby of LPL Financial.

Microsoft and Alphabet will publish their results on Tuesday after Bourse and Meta on Wednesday.

Before these deadlines, the Nasdaq was in the red for the third session in a row, in full consolidation after the fireworks of the first half, driven by Amazon (-1.08%) or Meta (-0.64%)

For Quincy Krosby, sub-par releases by these tech giants could cause a backlash from the market, like the one that followed last week’s results from Tesla and Netflix.

“The market is ripe for a correction, which could be triggered by disappointment from Microsoft or Meta, or even the Fed,” explained Quincy Krosby.

It is not so much the Fed’s monetary policy decision that will weigh, with an expected increase of a quarter of a percentage point, as the communication of the institution and the comments of its president Jerome Powell.

Before the Fed meeting, which begins Tuesday and ends Wednesday, the bond market was in a waiting position. The yield on 10-year US government bonds stood at 3.81%, against 3.83% on Friday at the close.

The Dow Jones continued to ride portfolio rotation, which sees investors seek out undervalued and neglected stocks so far.

The so-called defensive values, that is to say theoretically less sensitive than the average to the economic situation, such as Caterpillar (+0.81%), Johnson & Johnson (+1.69%) and 3M (+0.31%), were thus at the party.

A member of the Dow Jones, Apple was also gaining height (+0.61%), after price target increases by analysts at Deutsche Bank and Wells Fargo.

According to Quincy Krosby, the market expects the Cupertino (California) group’s sales to have been better than expected in the second quarter. Results are not expected until August 3.

Abused since the beginning of the year, especially at the time of the banking crisis, the major American banks were on the rise, whether Bank of America (+0.84%) or Wells Fargo (+0.92%).

Elsewhere on the rating, Mattel (+1.11%) celebrated the whirlwind start of the film “Barbie”, which brought in $155 million in North America for its first weekend in theaters. Worldwide, revenues have already reached $337 million, according to the specialist site Box Office Mojo.

The AMC movie theater chain, the darling of many retail investors during the pandemic, took off (+ 17.03%) after a Delaware judge invalidated on Friday the conversion of certain securities of the group into ordinary shares, which would have diluted the value of the latter.

The pizza giant Domino’s was up slightly (+0.09%), after publishing a net profit slightly above expectations. The group from Ann Arbor (Michigan) said it was optimistic about the benefits of its new partnership with Uber Eats.

Tesla (-0.66%) suffered from a lowering of recommendation from UBS, for which the share price, which has more than doubled since the start of the year, no longer justifies new purchases.

Chevron climbed (+ 2.23%) after unexpectedly publishing preliminary results on Sunday, prior to the official publication on Friday. The oil giant of San Ramon (California), anticipates a net profit higher than analysts’ projections.

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