After the end of the debt drama: Wall Street is making progress

After the end of the debt drama
Wall Street is moving forward

The impending insolvency of the USA has been averted, which is welcomed with relief on Wall Street. Fears of interest rate hikes are also fading. The US stock exchanges are increasing, especially tech stocks are very popular, the Nasdaq is increasing by more than one percent.

Hopes of a pause in interest rate hikes by the Federal Reserve gave US stock markets a boost on Thursday. Economic data provided clear arguments against a rate hike in June. In addition, there was growing conviction that after the House of Representatives, the US Senate would also vote in favor of raising the debt ceiling. The Senate will meet until members approve the bill, said Senate Majority Leader, Democrat Chuck Schumer. The Dow Jones index gained 0.5 percent to 33,061 points. S&P 500 and Nasdaq Composite rose 1.0 and 1.3 percent respectively.

Nasdaq Composite 13,100.98

Meanwhile, the US labor market showed renewed strength, with US private sector employment rising much more than expected in May, the ADP report revealed. The weekly jobs data, on the other hand, came in roughly as expected. Even if the employment situation made a pause in interest rate increases in June questionable, wage developments spoke against an interest rate hike. Because unit labor costs increased less significantly than initially estimated and also less than expected. Productivity fell in the first quarter of 2023; ISM and S&P Global Purchasing Managers’ Indices showed slowing activity in US manufacturing.

Art Hogan, chief market strategist at B. Riley, likened the data to a “Goldilocks scenario.” The data are strong enough to allay fears that the US economy could slip into recession. On the other hand, they are not so strong that the US Federal Reserve would have to be forced to raise interest rates at its next meeting on June 14th.

Profit taking at Salesforce 198.10

Salesforce posted a higher profit for the first fiscal quarter, benefiting from a margin development above the company’s guidance. Quarterly profit and sales exceeded market expectations. The business software maker also raised its earnings guidance to a record surplus, and raised full-year margin targets. However, the stock fell 4.7 percent. The price had risen sharply since the beginning of the year, so that investors probably took profits – especially since the outlook for the year after the convincing business figures was classified as very cautious.

Also at octa things went better than expected in the first business quarter, even if a loss was still reported. However, the price was weighed down by CEO Todd McKinnon. He warned that the business environment could deteriorate. The share then collapsed by 17.8 percent.

Dell increased by 1.5 percent. The company had surprisingly published business figures that were better than feared – despite a drop in sales of almost 20 percent.

crowd strike lost 1.6 percent. The provider of cyber security services swung into the profit zone in the first quarter. However, the flagging growth and an outlook for the year below market expectations were criticized.

The department store chain north current (+4.7%) posted a loss in the first fiscal quarter due to a decline in sales. However, the outlook for the year was confirmed. The company is also making progress in reducing its inventories and optimizing its supply chain.

Macy’s 11.76

Victoria’s Secret fell 8.7 percent. The lingerie supplier earned significantly less in the first quarter than in the previous year with declining sales. The revenue outlook for the year has been lowered. Chewy soared 21.6 percent after the pet products retailer reported first-quarter earnings and sales above market expectations.

In the wake of the general market recovery also came across Macy’s (+1.2%) into positive territory despite a lowered company forecast and disappointing first quarter figures. Another retail stock, Dollar General, was very weak, down 19.5 percent. The discounter spoke of a weaker market environment than initially thought.

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