Bitcoin also under pressure
Doubts about the interest rate turnaround are dampening sentiment on Wall Street
April 2, 2024, 11:19 p.m
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There is currently no indication that the Fed will cut interest rates. Hope in this regard is waning on Wall Street. This ensures a weak stock market close.
There are currently doubts that the US Federal Reserve will soon turn interest rates following the latest economic data from Wall Street. The Dow Jones Index the standard values closed one percent weaker at 39,170 points. The broader one S&P 500 lost 0.7 percent to 5205 points. The technology stock market index Nasdaq fell 0.95 percent to 16,240 jobs. The unexpected increase in the purchasing managers’ index and in new orders for US industry raised doubts as to whether the US Federal Reserve will soon cut interest rates again in order not to cause too much damage to the economy with the tightening of monetary policy.
Despite the high interest rate policy in the USA, the demand for personnel also increased. The key figure for job vacancies, which is important for the Fed, rose to 8.756 million at the end of February, as the US Department of Labor announced on Tuesday in its monthly survey (Jolts). Experts had only expected 8.750 million. After the surprise in US industry and the job market survey, investors were worried that the official US labor market data on Friday could also be surprisingly strong, said chief strategist David Russell from the investment platform TradeStation.
The monetary authorities around Fed Chairman Jerome Powell are trying to combat inflation with increased interest rates and cool down the hot labor market. On the futures markets, the probability of the Fed’s first interest rate cut at its meetings in June and July is currently estimated at just under 60 and a good 70 percent. Meanwhile, oil prices continued their rally. The North Sea crude oil variety Brent and the US variety WTI prices rose by around 1.7 percent to $88.93 and $85.11 per barrel (159 liters), respectively. This means they cost more than they have since the end of October.
“On the one hand, the unexpectedly good economic situation in China and the USA indicates increasing demand in the future,” said strategist Yeap Jun Rong from broker IG. “On the other hand, the involvement of the important producer Iran in the tensions in the Middle East is fueling new supply fears.” Iranian President Ebrahim Raisi has threatened Israel with retaliation after the attack on the Iranian embassy complex in Syria.
He came under pressure Bitcoin. The highest-volume cryptocurrency interrupted its recent rally and slipped 5.4 percent to around $66,000. On Wednesday the price had fallen just short of the 72,000 mark. Timo Emden from the analysis company Emden Research spoke of profit-taking: “Near the record high, the air still seems to be extremely thin.” When it comes to individual values, Tesla flew out of the depots. The US electric car pioneer’s shares lost 4.9 percent.
Tesla delivered far fewer cars in the first quarter than experts expected. A pessimistic forecast sent PVH into the basement. The US fashion company’s shares lost 22 percent. The New York-based owner of the fashion brands “Tommy Hilfiger” and “Calvin Klein” expects a decline in sales of around eleven percent for the first quarter. Investors also turned their backs on health insurers. UnitedHealth fell six percent, CVS Health fell seven percent and Humana fell more than 13 percent. Despite pressure from industry representatives on the US government, the hoped-for increase in reimbursement rates for providers of the “Medicare Advantage” insurance program has not yet materialized.