The New York Stock Exchange ended up on Tuesday, supported by several strong quarterly results, encouraging investors to move into equity markets. In addition, the hopes of realization of the trade agreement between the United States and China have prevailed over the doubts of the day earlier. Finally, the markets have appreciated the speculation that a draft Brexit agreement is in sight, if not imminent.
At the close, US indices rose about 1%. The Dow Jones index advanced 0.89% to 27,024 points, while the broad S & P 500 index gained 1% to 2,995 pts, and the Nasdaq Composite, rich in technology and biotechnology stocks, climbed 1.24% to 8,148 pts. In Europe, the stock markets ended up sharply in the hope of an agreement on Brexit: the EuroStoxx 50 gained 1.2%, and the CAC 40 took 1.05% in Paris.
The S & P financials and health indices both gained about 1.7% after the release of a series of better-than-expected results from JP Morgan Chase (+3%), Citigroup (+1.4%), Johnson & Johnson (+1.6%) and UnitedHealth (+8.1%). Wells Fargo (+1.7%) rose despite a sharp fall in earnings, as investors were pleasantly surprised by a rise in the bank’s revenues. Shares of Goldman Sachs (+0.3%) ended up slightly (after an initial fall) despite a small disappointment on the accounts of the merchant bank.
On Wall Street as on European markets, investors hope that an agreement on Brexit can be concluded, perhaps as early as Tuesday night. According to the agency Bloomberg, a draft agreement would be close between British and European negotiators and could come to completion in the late evening.
This information boosted the pound on the foreign exchange market. The British currency jumped late in the evening from 1.37% to $1.2781 on the interbank markets in New York.
The dollar index, which measures its growth against 6 reference currencies, fell by 0.11% to 98.35 points, while the euro was stable at $1.1029.
In bond markets (closed Monday in the United States), prices were falling as investors move to equity markets, pushing rates up. The 10-year T-Bond yield returned 4 basis points to 1.77%.
Prudence prevailed in the oil markets after the IMF report, in the fear of sluggish global demand. On the Nymex, the US light crude WTI yielded Tuesday night 1.4% to $ 52.84 (November futures contract), while Brent fell 0.98% to $ 58.77.
Gold was down again, dropping 0.83% to 1,485.10 an ounce, for the December futures contract quoted on the Comex market.