AI dreams inspire Microsoft
Wall Street takes off after Powell statement
02/07/2023, 10:45 p.m
Reading coffee grounds on the US stock exchanges: Fed boss Powell announces that inflation will fall significantly – that pleases investors. But he also emphasizes that this could take some time – which unsettles stock market traders. On the other hand, they are completely enthusiastic about artificial intelligence.
An appearance by US Federal Reserve Chairman Jerome Powell on Tuesday caused a rollercoaster ride and ultimately price gains on Wall Street. With his testimony at the Economic Club of Washington, stocks initially picked up momentum while the dollar weakened. As the year progressed, the indices came under pressure before finally picking up again.
The Dow Jones Index gained 0.8 percent to 34,157 points. The S&P 500 rose 1.3 percent and for the Nasdaq Composite was up 1.9 percent. The 2,008 (Monday: 792) price winners faced 1,072 (2,322) losers and 72 (75) titles closed unchanged.
Market seeks its direction
In the early part of the interview, Powell pointed out that inflation would fall significantly in 2023 – this caused price gains. But Powell also pointed out that bringing inflation down may take time. This was shown by the unexpectedly strong US job market report. This raised concerns about interest rates, which temporarily weighed on equities.
The US job market report for January showed unexpectedly strong job growth. This had raised the question of whether the market was right in speculating that interest rate hikes would end soon, or at least pause, and whether there was still a risk of further increases or at least a longer-term rise in interest rates, according to market participants.
The situation on the US bond market calmed down, even if the price losses continued to a limited extent. The 10-year return was 3.68 percent, compared to 3.40 percent before the jobs report. In the two-year range, 4.50 percent versus 4.11 percent. After some ups and downs, the dollar trended somewhat lighter, with the dollar index losing 0.2 percent.
Dupont and Linde firmly
The chemical company Dupont de Nemours earned more in the fourth quarter than analysts were forecasting. In addition, Dupont is confident that demand for consumer electronics will recover in the second half of the year. The capacity utilization of the semiconductor factories is likely to reach a low point in the first half of the year. The stock gained 7.5 percent.
The German industrial gases group linden tree, which will only have its shares listed in the USA from February 27, earned more than expected in the fourth quarter thanks to price increases, but sales suffered from unfavorable exchange rates and a slight decline in sales. Linde has announced further growth for the current year. The course rose by 4.4 percent.
A probably imminent takeover drove the price of Oak Street Health by almost 30 percent to $ 33.68 upwards. According to the Wall Street Journal, CVS Health intends to bid around $10.5 billion, or $39 per share, for Oak Street. CVS were 0.9 percent stronger in the market.
Skyworks Solutions improved by 12.5 percent. With the presentation of the business figures, the chip manufacturer announced a share buyback with a volume of 2 billion dollars. The cheggshares fell 17 percent. The education technology expert has delivered a disappointing outlook.
Bed Bath & Beyond smears
It was even worse, falling 48.6 percent to $3.01 Bed Bath & Beyond. The institution chain, which is struggling with financial problems, is trying to avert bankruptcy and wants to collect over $1 billion by issuing shares and options – the outcome is uncertain. A new interim CFO was also appointed. Wedbush analysts lowered the target price from $1.00 to $0.00. On Monday, the course, which had already been very volatile in the past few weeks, shot up by more than 90 percent, despite the very negative news situation at that time.
Curevac lost 11.3 percent. The fact that the biopharmaceutical company wants to raise fresh capital for up to 200 million dollars by issuing shares weighed on the course.
zoom increased by 9.8 percent. The provider of software for video conferencing announced that it would lay off 1,300 employees, or 15 percent of the workforce.
In addition, the shares of Microsoft before the expected announcement of a billion-dollar investment in the ChatGPT software. Also the securities of the Chinese search engine operator listed in the USA baidu rose by around ten percent to an eleven-month high.
Earlier, Hong Kong-traded Baidu shares rose about 15 percent after the company said it would complete internal testing of a ChatGPT-like project called “Ernie Bot” in March. The artificial intelligence-based projects are designed to simulate a conversation with a human.
oil prices rise
On the oil market, prices rose significantly after oil terminals were temporarily closed in southern Turkey due to the devastating earthquake in Turkey and Syria. The resulting bottleneck should only be of short duration, it said. Brent oil rose 3.5 percent.
Meanwhile, fears of tighter supply following the closure of a key export terminal due to the severe earthquake in Turkey drove oil prices in commodity markets. North Sea Brent crude and US light oil WTI rose 2.9 and 3.5 percent to $83.32 and $76.66 a barrel, respectively. The prospect of rising demand in China was also a price driver.