© Reuters. WALL STREET ENDS SPREAD
by Amy Caren Daniel and Stephen Culp
NEW YORK (Reuters) – Wall Street ended the last session of the week on very low spreads, torn between a few good results of companies and trade tensions between the United States and China, which have experienced a new episode.
On the week, its three main indices end up similarly stationary.
The american president Donald Trump says he is ready to impose tariffs on 500 billion (429 billion euros) of goods imported from China by the United States.
Such statements, after Beijing and Washington were imposed on each other the customs duties on $ 34 billion of their imports in the respective, are not to the taste of investors.
Donald Trump has also accentuated Friday its criticism of the policy of raising interest rates by the federal Reserve (Fed), asserting that it is withdrawing a “significant competitive advantage” enjoyed by the United States and that it could affect the u.s. economy.
The yields on bonds long americans have soared, traders, imagining that the latest presidential statements could incite Jerome Powell, the Fed chairman, to think twice before continuing the cycle of rising interest rates, which would undoubtedly have the effect of strengthening inflationary pressures.
As a result, the slope of the yield curve is steepest for over three weeks. The long maturities have risen, while the short end remained stable. The “spread” between five and 30 years of age reached a peak of three weeks and one between the two and the 10-year-old has been at the highest for the past 10 days.
In spite of everything, the expectations of traders on the continuation of the monetary tightening cycle has changed little. The probability of a fourth increase in December has slightly increased, at 55,59% against 53,69% on Thursday, in the light of the expectations implied traders are reflected in the evolution of the future.
Donald Trump is worried that the Fed is considering to raise rates two more times this year, said the chain CNBC a high-ranking official of the White House.
“The president speaks on the Fed, this is not commonplace,” said David Carter (Lenox Wealth Advisors). “Don’t be like everyone else, it can be good but doing it too much, it can do damage; it may be at this point in the light of the statements about Putin, the customs duties and the Fed”.
The Dow Jones has lost the 6.38 points (0.03 per cent) to 25.058,12 points. The S&P-500 has disposed of 2.66 points (0.09 percent) to 2.801,83 points. The Nasdaq Composite has left is 5.1 points (0.07 per cent) to 7.820,2 points.
Throughout the week, the Dow gained 0.15 percent, the S&P 0,02%, while the Nasdaq has yielded 0.07 per cent.
On the front of the results of companies, the analysts believe that the profits of the companies in the S&P-500 have increased by 22% in the second quarter, when they had been pencilling in a rise of 20.7% on July 1, according to Thomson Reuters I/B/E/S. For the moment, 87 companies in the S&P-500 have published their accounts and 83.9% have beaten the consensus.
Values, Microsoft (NASDAQ:MSFT) has gained 1.8%, which is the main support of the indices S&P-500 and Nasdaq. The group of Redmond on Thursday announced quarterly results better than expected, thanks to its platform Azure services and its software suite Office 365.
Microsoft is in the race with Apple (NASDAQ:AAPL) (-0,23%) and Amazon (NASDAQ:AMZN).com (+0,04%) to win the title of the first company that will have reached the thousand of billions of dollars of capitalization.
On the other hand, General Electric (NYSE:GE) has dropped and 4.44%, biggest loss in the S&P-500, the industrial conglomerate announced Friday a decline in more limited-than-expected earnings in the second quarter, but also again in slight decrease of its objective of cash generation, raising concerns about its prospects for the year.
Honeywell (NYSE:HON) International published on Friday a profit higher than expected in the second quarter thanks to increased demand, which has benefited its aerospace division and raised its forecast for earnings per share in 2018 for the third time.
The share rose 3.8%.
Schlumberger said to predict a double-digit growth in revenues generated by its activities abroad by 2019, saying that a recovery in oil markets, the international was in progress.
The share was downgraded to 1.24%.
The volume was six billion shares traded, below the average of 6,42 billion in the past 20 sessions.
The recent statements by Donald Trump on the rate have, in all logic, dropping the dollar, while it reached a peak a year the previous day.
The dollar index, measuring the evolution of the greenback opposite a basket of reference currencies, has erased three days of gains. Against the yen, the dollar has been in decline the most marked since February.
The dollar index gave up 0.77% to 94,417 after a higher one-year 95,62 registered on Thursday.
(With Kate Duguid and James Thorne)