Wall Street closes to record, gulled by the prospect of lower rates

Wall Street closes to record, gulled by the prospect of lower rates


New York (AFP)

On Wall Street, the Dow Jones, Nasdaq and S & P 500 index ended at new levels on Friday, intoxicated by the prospect of seeing rates fall at the end of the month after remarks this week from the boss of the US Central Bank.

According to final closing results, the New York Stock Exchange's flagship index, the Dow Jones Industrial Average, gained 0.90% to finish at 27,332.03 points.

The Nasdaq, with strong technological coloration, took 0.59% to 8,244.14 points.

The broad S & P 500 Index advanced 0.46% to 3,013.77 points, closing for the first time above the 3,000 point mark.

"There is still optimism about the rate cuts and there seemed to be some hope in the markets about the opening earnings season," said Jack Ablin of Cresset Wealth Advisors.

After a few quarterly results this week, investors will get to the heart of the matter next week including the accounts of major US banks such as JPMorgan Chase (+ 1.05%), Goldman Sachs (+ 1.23%) and Wells Fargo (+ 0.47%).

But Friday, it is still monetary policy that has electrified the stock market, as for several sessions.

The indices benefited in the second part of the week from the two interventions of the president of the American Central Bank (Fed) before the Congress, Wednesday and Thursday.

Three weeks before a meeting of the American institution, market participants agreed that the words of Jerome Powell, cleverly chosen as often in a central banker, have gathered all the ingredients for an announcement of a rate cut imminent.

Powell pointed to "concerns about weak global growth" and "uncertainties around trade tensions" that may "have an impact on the US economy".

Interest rate cuts make it easier for the various players in the economy - households, businesses and investors - to have access to capital. Thanks to the low interest rate policy since the post-crisis era, the stock market has been one of the main beneficiaries of the abundance of capital.

"Investors' appetite for low interest rates is insatiable, and the question now is whether the earnings season will take over or not," Jack Ablin said.

In the bond market, the interest rate on US 10-year debt stabilized at 2.131% against 2.11% the day before closing.

© 2019 AFP

ref: france24