SP 500: towards a continued rebound while waiting for the Fed

Wall Street continues to rise as it waits for the Fed

The New York Stock Exchange ended sharply on Friday, driven by strong results from cyclical companies such as Caterpillar (+3.3%) and Honeywell (+4.3%) and statistics seen as reassuring on inflation, reviving investors’ risk appetite ahead of the Fed meeting.

The sharp drop in Amazon.com (-6.8%), following its disappointing fourth-quarter forecast, was offset by a sharp rise in Apple (+7.6%) and cyclical stocks. The stock market showed strong resilience as buyers were undeterred by the rally in bond yields, with the 10-year yield ending above 4.00%, up 7 bps.

Ten of the eleven sectors closed higher, led by information technology (+4.5%). The sector was boosted by Apple, but Intel (+10.7%) had bigger gains thanks to its quarterly results and the announcement of a $10 billion cost cut. In contrast, the consumer goods sector (-0.3%) was the worst performer due to Amazon’s decline. However, the sector recovered well from a loss of 3.8%.

Moreover, the market showed resilience as it continued to rise despite economic data that should not prompt the Fed to reconsider its monetary policy tightening. Personal income and spending were solid, third-quarter employment costs fell slightly but remained high, and consumer sentiment was revised slightly higher. Only pending home sales fell.

S&P 500 Daily Price Chart – Key Levels

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