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(Boursier.com) – The US Stock Exchange rebounds Thursday after the announcement of a resumption of trade negotiations, scheduled for October, between the United States and China. The information has given investors a new appreciation of the risk and has reduced the safe havens of bonds, gold and certain reference currencies (yen, Swiss franc). Markets are eagerly awaiting Fed Chairman Jerome Powell, who will attend a debate on monetary policy in Zurich, Switzerland, on Friday. Employment figures in August in the United States, also released on Friday, will also be broken down.
Two hours before the close, the Dow Jones index on Thursday gained 1.5% to 26,751 points, while the broad S & P 500 index rose 1.27% to 2975 pts and the Nasdaq Composite, rich in technology values and biotechnology, gaining 1.55% to 8,100 pts.
Resumption of trade negotiations in early October
The day before, global equity markets had already made progress against the background of improving the international environment, in Hong Kong (where the extradition law to China was withdrawn), in the UK (where the risk of hard Brexit moves away) and in Italy, where the new government of Giuseppe Conte, more pro-European than the previous one, was enthroned this Thursday.
On Thursday morning, the bullish signal came from China, which the Ministry of Commerce announced that new trade talks are now officially scheduled for early October in Washington. The markets are therefore hopeful of a possible compromise between the two superpowers, who have been engaged for a year and a half in a fight without thank you by levies interposed customs.
Profits on gold, oil starts rising again
In response, safe haven securities came back Thursday, including gold, which fell by 2.2% to $ 1,525.70 an ounce for the December futures contract Comex. The yellow metal had climbed in recent weeks in favor of global uncertainties, to regain its highest level since April 2013. In contrast, oil, whose prices have fallen about 20% since April, confirmed Thursday its rebound from yesterday. The October futures contract on US light crude (West Texas Intermediate, WTI) gained 0.9% to $ 56.78 per barrel (after + 4.3% Wednesday), and Brent climbs 1% to 61% $ 35 (+ 4.19% Wednesday).
On the foreign exchange market, the yen and the Swiss franc fell by around 0.5% against the dollar, while the pound sterling gained another 0.5% to 1.2318 $ (after + 1.2% Wednesday) after the snub by British MPs to Prime Minister Boris Johnson. They voted Wednesday night against a Brexit without agreement, for a postponement of the date of Brexit to 31 January 2020, and against early elections from October 15 desired by Johnson.
The dollar index, which measures the fluctuations of the greenback against a basket of six reference currencies, has stalled, yielding 0.07% to 98.38 points, while the euro points to $ 1.1036 ( + 0.03%).
10-year US yield rebounds 10 basis points
US bonds are profit taking supported Thursday, resulting in a sharp rebound in interest rates, which had fallen in recent days to the lowest since summer 2016 … The yield of the T-Bond 10 years rebounded Thursday by 10 basis points to 1.57%!
Markets continue to anticipate a further decline in key rates on 18 September, after that of a quarter point in July, which was the first for more than 10 years. The CME Group's Fedwatch tool on Thursday evening indicates a 95.8% probability for a quarter-point decline, which would bring the fed funds rate back between 1.75% and 2%.
Several Fed members have spoken in recent days, but Fed Chairman Jerome Powell is the most anticipated for Friday when he will participate in a debate in Zurich, Switzerland. The Fed's Beige Paper, released Wednesday night, highlighted the resilience of US growth, while signaling signs of a slowdown in industry and agriculture related to rising tariffs.
Looking forward to the US employment report in August
On the macro-economic level in the United States, after the announcement on Tuesday of a contraction in the manufacturing sector in August (measured by the ISM index), the activity index in services, published Thursday, was more reassuring. The ISM thus stood at 56.4 in August, against 54 consensus and after 53.7 in July. On the other hand, the PMI services index (based on another methodology) deteriorated to 50.7, against a consensus of 50.9 and after 53 in July.
In addition, industrial orders rose by 1.4% in July over one month, more than the consensus of + 1% and after a revised increase to + 0.5% in June.
But the week's flagship indicator will undoubtedly be the employment report in August, one of the key indicators followed by the Fed. According to the consensus compiled by 'Bloomberg', 160,000 non-agricultural jobs were created against 164,000 in July. The unemployment rate should remain stable at 3.7% and hourly wage growth should slow to 3%.
Pending the full report on employment, data firm ADP on employment in the private sector reported Thursday that 195,000 job creations in August, against 150,000 consensus and 142,000 in July. For its part, the monthly Challenger study saw 53,480 layoffs in August, against 38,845 in July, a rise that would come largely from trade tensions. The technology sector would be the most affected.
Finally, last week, weekly jobless claims came out above expectations at 217,000, up from 215,000 consensus and 216,000 a week earlier.
VALUES TO FOLLOW
Facebook (+ 2%) could have been the subject of massive data piracy, according to TechCrunch, which claims that hundreds of millions of phone numbers have leaked from accounts of the California social network and have been found online .
More than 419 million files on several databases of users, including 133 million users based in the United States, 18 million in the United Kingdom and more than 50 million in Vietnam, would have 'leaked', reports the site information online. Some folders also included user names, gender, and location.
Match Group (-5.4%) wins with the launch of a competitor of weight in the USA, Facebook Inc now offering its own dating service. Facebook users will be able to integrate their Instagram accounts with the Facebook dating profile and add 'insta' followers to their 'Secret Crush' lists. Thus, users will have the opportunity to form further relationships, possibly in love, within their circle of friends.
Apple (+ 1.5%) has announced that it has sold $ 7 billion worth of bonds, even though the tech giant Apple already has a mountain of cash close to $ 200 billion. Apple will pay about 2.99% interest on these new bonds at 30 years … Moreover, while operators look forward to the new iPhones, the group could also work, according to TechCrunch, on a new Apple TV, which could also be presented next week, or maybe in the fall.
ExxonMobil (+ 1.2%) is a victim of a deterioration of the firm Redburn, which sees red and down two notches his note to 'sell', worried about the risks associated with the energy transition.
Bristol-Myers Squibb (stable). His treatment of cancer with Opdivo immunotherapy has unfortunately not achieved the main goal of a phase III trial in glioblastoma multiforme.
Mallinckrodt (-36.8%) is at worst. The pharmaceutical group in Dublin has hired experts and risks going bankrupt if it is unable to meet its obligations, said Bloomberg.
Bed Bath & Beyond (+ 6.6%), an American furniture distribution company, is expected to announce in the coming weeks the name of its new managing director, successor to Steven Temares, who left the group a few months ago.
Palo Alto Networks (+ 5.2%) climbs to Wall Street today. The cybersecurity group has not disappointed with its latest financial results, and allows itself to deliver double-digit revenue growth guidance for the next three years.
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