The corporate earnings reports accelerated Tuesday on Wall Street, without giving clear indications on the state of the US economy. The accounts of Blackrock (+3.2%) and Johnson & Johnson (+1.1%) were welcomed, but those of Bank of America (+0.1%) and especially of UnitedHealth Group (-4%) have disappointed. Qualcomm rose 23% after a surprise friendly agreement with Apple (+0.01%) on their patent dispute.
The leading Wall Street index, the Dow Jones Industrial Average, gained 0.26% to 26,452.66 points. The Nasdaq rose 0.30% to 8,000.23 points, rising above the symbolic bar of 8,000 points for the first time since October. The broad-based S & P 500 index gained 0.05% to 2,907.06 points, a bit closer to the record set on September 20, 2018.
The indexes were in the green early in the session, led by the solid results of several companies such as the Johnson and Johnson (+1.10%) and the first asset manager Blackrock (+3.25%).
Markets will also closely monitor Wednesday’s release of Chinese GDP growth in the first quarter. It is expected to rise 6.3% year-on-year, according to the consensus, after 6.4% in the fourth quarter of 2019, and the lowest in at least 27 years.
On the macro-economic side, Tuesday, industrial production in the United States disappointed in March, down 0.1% over one month, against a consensus of 0.3%. The utilization rate of production capacity was reduced to 78.8%, compared to 79.1% consensus and 79% for the revised reading in February. However, the markets did not react badly to these figures, which seem mainly related to the decline in the production of a single sector, the automobile.
In addition, the NAHB’s US real estate market index came out in line with expectations for April at 63 after 62 in March.
However, China will at the same time announce its March data for industrial production, investment and retail sales, which could show an improvement at the end of the quarter. This week already, several rather encouraging indicators came from the 2nd world economy (increase in credit and exports in March), suggesting that the worst of the slowdown may have passed, especially if a trade agreement is signed soon with the states.
