Buying spree worries analysts
Dow sets new record – alarm bells are ringing
December 14, 2023, 11:06 p.m
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On Wednesday, the head of the US Federal Reserve clearly indicated interest rate cuts in the coming year for the first time – triggering “the strongest wave of purchases of the entire year.” But experts see clear signals of overheating – and warn urgently of a possible market correction.
The prospect of a turnaround in interest rates in the new year pushed the Dow Jones Industrial to another high on Thursday. At times it climbed just below the 37,300 point mark. The Nasdaq 100 and the S&P 500 are now not many points short of a record.
The best-known Wall Street index rose by 0.43 percent to 37,248.35 points Dow Jones from the day. The market breadth S&P 500 gained 0.26 percent to 4719.55 points. The one that is predominantly stocked with technology stocks Nasdaq 100 After a friendly start, it turned into the loss zone and ultimately fell by 0.15 percent to 16,537.83 points.
The day before, the US Federal Reserve fueled the markets by giving clear signals for interest rate cuts in 2024. Jerome Powell “triggered the strongest buying wave of the entire year” on Wall Street, CMC Markets commented on the Fed President’s statement on Wednesday. After Powell did not mention the word interest rate cut almost two weeks ago, three steps downward by 0.25 percentage points each have now been indicated for 2024.
Euphoria decreases
Nevertheless, the euphoria of Wall Street investors is waning after the US Federal Reserve’s interest rate decision. According to analysts, the risk of a setback on the stock market increases the longer the record hunt continues. An indicator of this is the “Fear & Greed Index” from CNN Business, said Christian Henke from broker IG. This is intended to measure the emotions of investors on the stock market. The index is in the “Greed Sector”, shortly before entering the “Extreme Greed” market state, explained Henke. “This increases the warning signs that Wall Street is overheating.” If the index continues to rise, investors would have to expect an imminent correction.
On the raw materials market, investors primarily turned to oil. The North Sea oil Brent and US oil WTI prices rose by 3.3 percent to $76.72 and $71.71 per barrel respectively. However, the US currency went downhill. The Dollar index fell by 0.9 percent and was at 101.95 points. The Euro in return, rose 1.1 percent to $1.0989.
Cancer study drives Moderna
The individual values, among other things, came under pressure Adobe. The software developer’s shares lost 6.3 percent after a disappointing forecast. The company expects sales of between 21.30 and 21.50 billion euros in 2024; LSEG experts have assumed an average of 21.73 billion.
On the other hand, the shares of the biotech company were in demand Moderna, which jumped by 9.2 percent after positive study results on a cancer vaccination. Increased on a high volume Teslashares by 4.9 percent.
An upgrade, however, provided a boost Foot Locker. The sports shoe retailer’s titles jumped almost 10 percent. The experts at broker Piper Sandler had set it to “Overweight” after previously “Neutral”. The price target was also raised to $33 from $24. The reason is, among other things, Foot Locker’s partnership with the professional basketball league NBA.
Another share increase by the stock market guru’s investment company Warren Buffett pushed the stock from Occidental Petroleum at. The US oil company’s shares rose by 2.6 percent. According to a mandatory publication, Berkshire Hathaway bought almost 10.5 million Occidental shares this week for a total of around $588.7 million, increasing its stake to around 27 percent. Berkshire has been regularly buying Occidental shares since the start of the Ukraine war and the subsequent rise in oil prices. However, she has stated that she has no intention of taking over the company.