Birkenstock in demand
Salesforce crash hits Wall Street
31.05.2024, 01:04
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After the previous day’s losses, Wall Street is recording further losses. SAP rival Salesforce presents a disappointing outlook, after which other industry stocks also come under pressure.
A slowdown in the US economy and a slump in the share price of software giant Salesforce are hitting Wall Street. Dow Jones Index of the standard values closed 0.9 percent lower at 38,111 points on Thursday. The technology-heavy Nasdaq fell 1.1 percent to 16,737 points. The broad-based S&P500 lost 0.6 percent to 5,235 jobs.
US gross domestic product (GDP) grew by 1.3 percent annualized from January to March. This is the weakest figure since the second quarter of 2022, when the economy actually contracted. Peter Cardillo, chief economist at asset manager Spartan Capital Securities, was calm: “Lower economic growth is not necessarily so bad, as we are still in a growth phase.” The revision of the so-called PCE index – a particularly important inflation measure for the US Federal Reserve – for the first quarter is also good news, which should stabilize the stock market.
Salesforce in free fall
A collapse in the share price of SAP’s rival also caused losses in the most important US indices SalesforceThe share price fell by around 20 percent after a disappointing outlook. Salesforce announced that sales in the second quarter would be between 9.2 and 9.25 billion dollars. Analysts had expected 9.37 billion. In view of the high inflation and tight monetary policy, customers were apparently holding back on investing in software.
In contrast, shares of Birkenstockwhich increased by almost twelve percent. The traditional German company had slightly raised its annual outlook in view of strong demand for its cork sandals and newer closed shoes.
A report on the plans of Teslaa highly advanced software for autonomous driving in China, boosted the shares of the electric car pioneer. The shares rose by 1.5 percent. The company is considering offering the software to car users as a monthly subscription, people familiar with the project said.
PCE figures could provide clues to interest rate policy
Investors are now waiting for the publication of the PCE figures for April on Friday. The barometer is based on a basket of consumer goods. In March it rose by 2.7 percent year-on-year. Stagnation at this level is expected for April, which would speak against an early interest rate turnaround by the monetary authorities around Fed Chairman Jerome Powell. The latest statements from the US Federal Reserve have also failed to calm investors. “I see no urgency” for a rate cut “in the near future,” said the head of the Fed’s New York district, John Williams, at a meeting of the Economic Club of New York on Thursday.
According to insiders, the oil cartel OPEC+ is working on a deal for further production cuts in light of the recent increase in supply and weaker demand. The Organization of Petroleum Exporting Countries wants to allow its members to extend some of the existing measures until 2025, said three people familiar with the talks. The agreement is likely to be decided at the OPEC+ meeting on Sunday.
You can find out more about today’s stock market events here.