Auto stocks on the rise
US stock markets creep into plus
02.07.2024, 22:42
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Independence Day and new labor market data lead Wall Street to expect a subdued day on the stock market, but things turned out differently. Auto stocks in particular caused strong fluctuations, almost reaching new record highs.
Prices on the US stock exchanges continued to rise gradually until the evening. Observers had expected a sideways movement because trading on Wednesday was only shortened due to the Independence Day holiday on July 4th and there was no trading at all on Thursday. New labor market data is also due on Friday, which often causes people to be cautious. But as the day went on, the trend continued to rise, with the technology-heavy Nasdaq indices in particular gaining ground.
The Dow Jones Index ended the day 0.4 percent higher at 39,332 points. The S&P 500 improved by 0.6 percent, the Nasdaq indices rose by up to 1.0 percent and only just missed new record highs. According to initial counts, there were 1850 (Monday: 887) price winners and 971 (1926) losers on the NYSE. 55 (62) titles closed unchanged.
After the upward trend of the previous days, yields on the bond market fell again somewhat, which supported the mood for stocks. The number of job openings in the USA was higher than expected in May, which signals a robust job market and speaks against falling interest rates. However, US Federal Reserve Chairman Jerome Powell said at the ECB central bank symposium in Sintra that inflation was on the decline again after a rebound at the beginning of the year. He did not comment on whether this was enough to justify a rate cut. “We want to be more confident that inflation will move downwards sustainably before we start easing policy,” he simply stressed. The probability of a first interest rate cut in September is currently just under 70 percent, slightly higher than the previous day.
There was little activity on the foreign exchange market, with the euro last trading at 1.0745 dollars. Oil prices stagnated at two-and-a-half-month highs after the sharp rise the previous day. Participants spoke of profit-taking.
Tesla, Rivian and Nikola with strong price gains
By far the day’s winners were Car stocks. Its S&P industry index shot up by over 8 percent. The Tesla shares increased its strong gains from the previous day by 10.2 percent to its highest level since mid-January. The electric car pioneer’s sales figures for the second quarter were better than expected, even though sales were down. It was also well received that Tesla once again left its fiercest rival BYD behind, even though BYD was able to increase its deliveries.
Rivian increased its sales more than expected, at 9 percent year-on-year. The fact that production fell compared to the previous quarter was not a problem. Rivian gained 7 percent. Nicholas jumped by 8.6 percent. The manufacturer of hybrid trucks exceeded its own expectations in the second quarter with 72 deliveries compared to 60. Polestar Automotive fell by 1.2 percent. The company posted an operating loss in its first quarter.
GM (+0.6%) hardly benefited from the fact that the carmaker reported its best quarterly sales in several years. Sales of electric cars jumped by 40 percent, but still only made up a very small part of total sales.
Presidential damper for pharmaceutical stocks
Pharmaceutical stocks were more likely to be sold. US President Joe Biden and Senator Bernie Sanders had called on Danish drugmaker Novo Nordisk to “significantly reduce” the prices of Wegovy and Ozempic, blockbuster drugs for obesity and type 2 diabetes, respectively. At the same time, they called for an expansion of the Medicare program for negotiating drug prices. Eli Lilly fell by 0.8 percent, Pfizer by 1.4 and Merck & Co by 0.1 percent. The fact that Eli Lilly received US approval for an Alzheimer’s drug only slightly supported the share price.
Tempur Sealy rose by 2.4 percent. The US antitrust authority is blocking the planned takeover of Mattress Firm by Tempur Sealy for $4 billion. Tempur Sealy CEO Thompson had said that they would probably consider share buybacks if the deal did not go through.
Paramount Global rose by 5.7 percent. According to the New York Times, billionaire Barry Diller is considering a takeover offer.
You can find out more about today’s stock market events here.