AI rally gets new momentum
US investors are taking inflation data in stride
March 12, 2024, 11:00 p.m
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Although the latest inflation data came in higher than expected, Wall Street rose significantly. Convincing figures from Oracle ensure strong profits, especially in the technology sector.
US stock markets continued their upward trajectory despite the surprise rise in US inflation. The Dow Jones Index the standard values closed 0.6 percent higher on Tuesday at 39,005 points. The technology-heavy one Nasdaq advanced 1.5 percent to 16,265 points. The broad one S&P 500 gained 1.1 percent to a record closing of 5175 points.
US consumer prices rose 3.2 percent in February compared to the same month last year, after 3.1 percent in January. Economists surveyed by Reuters had expected an unchanged figure of 3.1 percent. However, according to analysts, the setback is unlikely to affect the likelihood of the US Federal Reserve’s first interest rate cut relatively soon. “We’re on a straight path to a rate cut in June, and I don’t think anything can change that yet,” said Robert Pavlik, portfolio manager at asset manager Dakota Wealth.
Other experts urged caution. “Inflation will probably drag on for a few more months, so the Fed’s first interest rate cut may take a little longer than expected,” said Russell Price, chief economist at financial services provider Ameriprise. On the futures markets, the probability of the Fed easing monetary policy in June is estimated at almost 70 percent and in July at more than 85 percent. Falling interest rates at later meetings are more or less a foregone conclusion.
The Dollar index rose briefly by up to 0.3 percent after the data was published. It then leveled off at a slight plus to 103.029 points. The Euro In return, it lost 0.1 percent to $ 1.0913. Investors in the bond, energy and metal markets also largely ignored the numbers.
Bitcoin remains in demand
The relief after the new US inflation data helped Bitcoin to a new record high. The cryptocurrency with the highest sales temporarily climbed by up to 1.2 percent to $72,987.74, making it more expensive than ever. However, after reaching the new record mark, market participants soon cashed in. The cyber currency fell by 1.6 percent to around $70,950. However, the experts were calm. “In view of ambitious price levels, investors could temporarily sell off part of their profits. However, this should not put a stop to the price rally,” said Timo Emden from the analysis house Emden Research. Investors’ interest rate reduction fantasies are likely to further play into the hands of risky and interest-free investments such as Bitcoin.
Already on Monday, the Bitcoin market capitalization overtook the valuation of all silver stocks. “The changing of the guard is another historic milestone in history,” commented Emden. The development shows that Bitcoin is seen in many places as a store of value and is now viewed in black and white as at least equal or even more efficient than the precious metal silver.
The individual values were in demand Oracle with an increase of almost twelve percent after strong figures for the third quarter. The SAP competitor has exceeded expert expectations in terms of profits thanks to high demand for its cloud offering in the wake of the AI boom. In the wake of Oracle, Nvidia shares, which recently fell, also rose by a good seven percent.
On the other hand, shares flew out of the depots Boeing, which lost a good four percent. According to a newspaper report, the aircraft manufacturer failed more than a third of the tests during extensive safety tests carried out by the US Federal Aviation Administration (FAA) on the 737 MAX.