The DOW JONES rises a slight 0.12% to 44,346 points, while the S&P 500 is practically flat, at 6,001 points. The NASDAQ lost 0.13% to 19,273 points.
The major Wall Street indices come from a market rally that began after Donald Trump’s presidential victory in the US elections last Tuesday. Only in yesterday’s session, the Dow Jones rose more than 300 points to close above 44,000 pointswhile the S&P 500 exceeded 6,000 points. It was the first time for both indices closing above those levels.
Meanwhile, the Nasdaq Composite rose slightly on the session, ending at an all-time closing high for the fourth consecutive day. The small-cap-focused Russell 2000 rose 1.5% and is up 8% since the election.
So far, the market has celebrated with significant increases the more than possible change in US economic policy, but some voices warn that measures such as trade tariffs or a tough crackdown on immigration could cause a rebound in inflation and affect to the direction of the Fed’s monetary policy.
Today the American press is making headlines that Senator Marco Rubio, known for his aggressive stance on China, is expected to be named Secretary of State. Mike Waltz, who views China as a “greater threat” to the United States than any other nation, appears poised to be national security advisor.
“If those tariffs are applied, if the so-called deportations are applied, that would have an absolute inflationary impact and, therefore, would lead to higher bond yields,” warns Kevin Thozetmember of the investment committee of Carmignacin statements collected by Bloomberg. “Higher bond yields along the curve may start to show at some point,” especially given high stock market valuations.
“Until Trump’s inauguration in January, we will be in a period where there will be some type of uncertainty regarding the implementation of his policy measures,” adds Thozet.
Meanwhile, on the macroeconomic agenda of the day, investors learned about the NFIB small business optimism index, with a reading of 93.7 in October, which is above market estimates. But all attention is focused on tomorrow, when it will be known the consumer price index (CPI) for October. It is expected that this index has rebounded in its general reading from 2.4% to 2.6% and that its underlying reading will remain at 3.3%, still very far from the Fed’s 2.0% objective.
In the business field, one of the great protagonists of the day is Home Depot, which has presented earnings per share of $3.67, above the $3.64 expected by the market. Revenues rose to 40,220 million, also exceeding the expected 39,320 million.
The retailer has raised its annual sales forecast, banking on resilient demand from professional contractors which will offset weak spending on larger projects, such as kitchen renovations. It now expects total sales to increase around 4%, including the impact of the SRS Distribution acquisition. It previously expected total sales to rise between 2.5% and 3.5% for the year. Home Depot shares rise 1.5% at the open.
Shopify’s Wall Street-listed shares soar 20.5% in early trading after the company has raised its revenue forecasts for the fourth quarter. Shopify forecasts revenue to be in the mid-twenties percentage growth range, while analysts had expected a 22.7% increase.
Shopify reported a 26% increase in revenue to $2.16 billion for the third quarter, compared with analysts’ median estimate of $2.11 billion, marking the ninth consecutive quarter of beating sales. Operating income was 283 million, compared to 122 million in the same quarter last year.
Yesterday at the market close Live Nation published its accounts, which shot up 6.22% at the market opening. Ticketmaster’s parent company reported earnings of $1.66 per share in the third quarter, compared to the $1.59 earnings the market had expected.. Revenues, however, did not reach forecasts, with a figure of 7,650 million compared to the 7,750 million expected.
Today, however, investors are taking some profits in Tesla. The shares of the electric vehicle manufacturer fell 3% in the New York morning, ending a spectacular rally of 40% since last Tuesday’s elections that has returned the trillion dollar market capitalization club.
In analyst recommendations, SentinelOne rises 2% after Deutsche Bank upgraded it from ‘hold’ to ‘buy’, saying the Crwodstrike-related drop in July may help give momentum to the company. The firm also raises the price target from $25 to $32 per share, with a 18% upside potential compared to Monday’s close.
In raw materials markets, oil prices are trying to rebound after the falls of recent days, with a rise of 1.0% to $68.72 per barrel for the West Texas variety. The benchmark Brent barrel in Europe advances 0.82% to $72.42.
Today investors learned that OPEC has cut its forecast for global oil demand growth for this year and next for the fourth consecutive month, with special emphasis on the situation in China and India.
One factor that has weighed on oil and other commodity prices in recent days is the strength of the dollaras a stronger dollar makes assets more expensive for buyers with other currencies. Today the euro falls 0.30% against the dollar, leaving the exchange rate at 1.0626 dollars for each community currency.
The asset that seems to have no brakes is Bitcoin, which has touched $90,000 today, although at this time the gains are moderating, with a rise of 5% in the last 24 hours to $86,002, according to data from CoinMarketCap. Meanwhile, spot gold rebounds 0.08% to $2,620 per ounce.