After the Fed paused interest rates
Hope of interest rate peaks is driving Wall Street
November 2nd, 2023, 10:50 p.m
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Pleasing corporate balance sheets are boosting sentiment on the US stock markets. Above all, Fed Chairman Powell’s statements are creating a buying mood among investors. Investors are also turning to bonds.
Investors on Wall Street see the interest rate peak in the USA within reach and have eagerly bought stocks. The Dow Jones Index the standard values closed 1.7 percent higher at 33,839 points. The broader one S&P 500 gained 1.9 percent to 4318 points. The technology stock market index Nasdaq climbed by 1.8 percent to 13,294 jobs. Positive company balance sheets also ensured a good atmosphere on the floor.
The US Federal Reserve Federal Reserve As expected, there was another pause on interest rates when making its decision on Wednesday. The subsequent statements by Fed Chairman Jerome Powell also fueled hopes that the end of monetary policy tightening could finally have been reached. Analysts were also cautiously optimistic. “The most likely scenario is that the Fed is now done raising interest rates. However, it may take a while before they cut them again,” said Raphael Olszyna-Marzys, an economist at Swiss private bank J. Safra Sarasin. Traders’ bets that the Fed will keep interest rates steady in December rose to 85.5 percent from 79.5 percent, according to CME Group’s FedWatch tool.
On the bond markets, investors stocked up on government securities. In return, the yield on ten-year US securities fell to 4.67 percent from 4.791 percent on Wednesday. The Fed has raised interest rates from near zero to a range of 5.25 to 5.50 percent since the start of 2022 to curb strong inflation and cool the hot labor market. The market will face its next test this Friday when the labor market report for October is presented. Experts expect that 180,000 jobs were created in October. That would be significantly fewer than the 336,000 in September. However, 70,000 to 100,000 jobs per month are already considered sufficient to supply the growing US population with jobs.
Starbucks and Paypal score points
Growth-dependent heavyweights from the Tech sector such as Apple, Google parent Alphabet and Microsoft picked up speed due to interest rate expectations and increased by up to 2.1 percent. The shares of the electric car manufacturer Tesla rose by 6.3 percent. However, the focus for companies remained on balance sheets and forecasts. The shares of were in demand Starbuckswhich rose by 9.5 percent after a surprisingly high profit increase.
Also the papers from Paypal rose 6.6 percent as the payments giant raised its adjusted full-year profit forecast. There was a spike in the semiconductor sector Qualcomm with a price increase of 5.8 percent. The chip designer forecast first-quarter sales and profit above Wall Street estimates. The video streaming company ignited a price rocket Roku with an optimistic outlook. The shares rose by 30.7 percent. Also the drug manufacturer Eli Lilly performed better than expected in the quarter, giving its shares a 4.65 percent gain.
However, came under pressure Moderna with a discount of 6.5 percent. The US biotech company has cut sales expectations for its corona vaccine due to weak demand.