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Victoria Adam
(Boursier.com) – The New York Stock Exchange gained ground Friday, despite the outbreak of trade hostilities, the same day, between the United States and China. Investors are currently betting that tariffs will have a limited effect on the growth of the US economy. Job creations were particularly strong in June across the Atlantic, which supported the stock indices. Technological and biotechnology sectors jumped after Biogen (+ 19.6%!) Positive results of clinical tests on treatment for Alzheimer's disease.
Friday night, index Dow Jones gained 0.41% to 24.456 points, while the broad index S & P 500 gained 0.85% to 2.759 pts, and that the Composite Nasdaq rich in technology and biotechnology stocks, jumped 1.34% to 7.688 pts. The three indices rebounded over the week, following two successive weeks of decline: over five sessions, the DJIA returned 0.75%, the S & P 500 gained 1.5% and the Nasdaq returned 2.4%. Since the beginning of the year, the DJIA is still down 1%, while the S & P 500 is up 3% and the Nasdaq leaps 11.4%.
Strong job creation in June, figures May and April revised upwards
On the foreign exchange market, the dollar index which reflects its evolution against a basket of 6 currencies, yielded 0.46% to 94 , 04 points, while the euro gained 0.47% to $ 1.1745. In the bond market, interest rates fell slightly on Friday, as the 10-year US T-Bond yield ended at 2.82% (-1 basis point). On Thursday, the Fed worried in its Minutes of the negative effects of customs barriers on investor confidence, which suggests that the central bank will be cautious in the coming months in its monetary tightening policy. The dollar and rates reacted downward after the release of this report, as well as the announcement of more modest wage growth in June, which bodes for moderate inflation. [19659005] Oil ended the week in a disorganized order: the August futures contract on US light crude WTI Friday gained 1.18%, to $ 73.80 on the Nymex, while the Brent fell 0.36% to $ 77.11
The news of the day in the United States came from the government's report on employment in June. The US economy has created more jobs than expected, with 213,000 new jobs against a consensus of 190,000. On the other hand, the unemployment rate rose slightly to 4%, compared to 3.8% consensus and 3.8% in May. The average hourly wage increased quite modestly, by 0.2% compared to May, against + 0.3% consensus. Year-on-year, wages rose by 2.7%, slightly less than expected by consensus (+2.8%).
It should be noted that, in addition, job creations were revised the rise in April and May, from 159,000 to 175,000 in April and from 223,000 to 244,000 in May, reflecting the strength of the economy across the Atlantic, despite concerns about a possible escalation in the trade war.
34 billion dollars of Chinese and American products now taxed
The trade deficit for May 2018 came out weaker than expected in May, to 43.1 billion $, against 43.7 billion $ consensus, and a deficit of $ 46.1 billion in April.
The United States and China have just implemented their first wave of tariffs … Beijing announced Friday that its taxes on $ 34 billion worth of products imported from the United States came into force just hours after implementation United States to China $ 34 billion …
This is the first tranche of a block of $ 50 billion ($ 34 + $ 16 billion) that Washington has planned to tax, and Beijing has already promised to respond to the next $ 16 billion. Beyond that, Donald Trump asked his administration to find $ 200 billion of additional Chinese products to be taxed, and would have evoked another $ 200 billion or even $ 300 billion more … If the escalation continues, these measures could increase the total value of Chinese products taxed to more than $ 550 billion, more than imports from the Asian giant ($ 505.6 billion in 2017).
Global stock markets worried about the fallout of a war
At this point, investors are struggling to estimate the impact of the rise of protectionism on US growth, which remains strong for the moment even though stock markets have fallen since the beginning of hostilities, triggered in March by Donald Trump. The Dow Jones has lost 5% since the end of February, while the Shanghai CSI 300 has plummeted 18% and in Europe, the EuroStoxx 50 suffered less (-0.4%). [19659005OnFridayRussiacounteredWashington'simposedtaxesonsteelandaluminumThePrimeMinisterhbadignedatextimposingadditionaltariffsrangingfrom25%to40%oncertainproductsimportedfromtheUnitedStatesincludingtechnologiesrelatedtoroadconstructionequipmentforthehydrocarbonindustry'instrumentsformetalprocessingandrockdrillingaswellasopticalfiber
VALUES TO FOLLOW
The Nasdaq Biotechnology Index surged 3.7%, supported in particular by the title Biogen which soared by 19.6%! The group announced on Friday positive results of an interim study on a treatment of Alzheimer's disease that it develops jointly with Japanese Eisai .
The phase II study was tested in 856 patients with early-stage Alzheimer's disease. She showed that the treatment slowed down the progression of Alzheimer's disease by reducing the amyloid accumulated in the brain.
The laboratories add that treatment said "BAN2401" has demonstrated a tolerable character profile acceptable during 18 months of administration of the drug.
Large technology stocks also rose significantly on Friday, like Facebook (+ 2.4%), Amazon.com (+ 0.6%) Alphabet (+ 1.2%), Nvidia (+ 1.9%), Microsoft (+ 1.4% ) or Intel (+ 1.2%). Apple climbed 1.4% after a recommendation from broker Loop Capital that raised from $ 195 to $ 210, its target price on the record of the firm to the apple.
Citigroup (+ 0.8%) progressed on the approach of the publication of its 2nd quarter account, expected next Friday, July 13th. Analysts expect on average earnings per share of $ 1.57, for revenues of $ 18.5 billion. A year earlier, over the same period, the US banking group had earnings per share of $ 1.28 and revenues of $ 17.9 billion.
JP Morgan Chase (+0, 3%) will also publish its quarterly on Friday, July 13th. According to the press, the US bank could be interested in the file Deutsche Bank . The fall in market valuation of the German bank would thus attract the interest of several major players in finance, according to the magazine 'Wirtschaftswoche' published Friday. The 'Reuters' agency also relays these rumors of corridors, according to which the Deutsche Bank would interest the American group JP Morgan Chase and the Chinese Industrial & Commercial Bank of China ( ICBC ). Whether credible or not, this rumor has raised the title of the German bank by 2.5% Friday in Frankfurt.
Wells Fargo (+ 1.18%) will publish its results for the second quarter of 2018 Friday July 13th. Analysts expect on average earnings per share of $ 1.12, for revenues of $ 21.7 billion. A year earlier, over the same period, the US banking group had earnings per share of $ 1.07 and revenues of $ 22.2 billion.
PriceSmart (-10.7% ), a US player in the warehouse market, released its third quarter fiscal results. Earnings were $ 18.7 million ($ 0.61 per share), compared with $ 18.8 million ($ 0.62 per share) a year earlier. Revenues amounted to $ 782.2 million, compared with $ 730.3 million a year earlier. Analysts on average expected a quarterly EPS of $ 0.63, for revenues of $ 777 million.
Delta Air Lines (+ 0.6%) will release its second quarter results on July 11 next. Analysts expect average earnings per share of $ 1.73 and revenues of $ 11.6 billion. A year earlier, over the same period, the group posted earnings per share of $ 1.64 and revenues of $ 10.8 billion. At the time of the publication of the accounts of the first quarter of 2018, Delta Air Lines announced to aim, on the T2, on a growth of 3 to 5% of its unitary income.
Ford Motor (stable). The group announces that it sold 62,057 vehicles in China in June 2018, a decrease of 38% year-on-year. Sales in the first half amounted to 400,443 units, down 25% from last year.
PepsiCo (stable) will publish its second quarter results on July 10th. Analysts expect average earnings per share of $ 1.52 and revenues of $ 16.1 billion. A year earlier, over the same period, the group had earnings per share of $ 1.50 and revenues of $ 15.7 billion. When the accounts for the first quarter of 2018 were released, PepsiCo announced that it was aiming for a $ 5.70 EPS for the year, with revenues up by at least 2.3%.
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