Chip sector supports
Wall Street recovers from losses
January 18, 2024, 10:35 p.m
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Bargain hunters are taking advantage of the US stock markets. Indices are recovering from recent losses. Technology stocks in particular benefited from unexpectedly good business development by the world’s largest semiconductor company TSMC from Taiwan.
After the sharp declines of the last two trading days, Wall Street has recovered. Recently, interest rate cut hopes were priced out on the stock market after US Federal Reserve officials dampened corresponding expectations with hawkish statements. Technology stocks received a boost on reporting day from Taiwanese chip maker TSMC’s numbers, which were seen as encouraging.
The Dow Jones Index increased by 0.5 percent to 37,469 points. The S&P 500 increased by 0.9 percent and the Nasdaq Composite recorded an increase of 1.3 percent. The 1,602 (Wednesday: 711) price winners were compared to 1,229 (2,125) losers. 67 (84) titles closed unchanged.
The President of the Federal Reserve of Atlanta, Raphael Bostic, also spoke from the ranks of the US Federal Reserve. According to his assessment, the Fed will initiate a turnaround in interest rates in the third quarter. Previously, Bostic had forecast that rate cuts would likely begin in the fourth quarter. Similar to Fed Governor Christopher Waller, Bostic also spoke out in favor of careful data analysis and called for “let events continue to unfold before starting to normalize monetary policy.”
Economic data points against rapid interest rate cuts
US economic data also spoke against any imminent interest rate cuts. Among other things, retail sales announced on Wednesday showed a surprisingly significant increase in December, showing that Americans continue to enjoy spending. At the same time, some important economic data was published: construction starts did not fall as sharply in December as expected and more building permits were issued than expected. Contrary to expectations, the number of initial applications for unemployment assistance fell last week. The Philadelphia Fed Index, on the other hand, remained in negative territory in January and recovered less strongly than economists had forecast.
On the corporate side, the aluminum company had Alcoa Financial figures for the fourth quarter presented. The stock lost 1.6 percent after initial gains. The group narrowed its fourth-quarter loss despite lower revenue as it reduced costs. In the conference call, Alcoa announced that aluminum output is expected to increase slightly this year, while alumina production is expected to decrease.
Meta is gaining
The adhesive manufacturer’s business figures were mixed HB Fuller classified; the share still gained 1.7 percent. On the other hand, the numbers were good Fastenal (+7.2 percent). The supplier of screw and fastening elements benefited from the demand for security technology in the final quarter. The Meta share rose by 2.1 percent after Sheryl Sandberg announced that she would also be leaving the board of Facebook’s parent company. From May she will be available to the company as an informal advisor. Sandberg stepped down as COO in September 2022 after 14 years.
The share of Walt Disney (+2.1 percent) was unimpressed by the fact that activist investor Nelson Peltz intensified his attacks against the company in the run-up to the general meeting and called for the replacement of Disney CEO Bob Iger, better streaming margins and a restructuring of the ailing studios . Calls for a board seat for both Peltz and former Disney executive Jay Rasulo were also reiterated. Disney rejects Peltz and Rasulo as board candidates.
The shares of Spirit Airlines fell by 7.2 percent. The trigger was a Wall Street Journal report that said the low-cost airline is exploring options to address emerging financial challenges, including near-term debt maturities. JetBlue Airways’ $3.8 billion takeover bid for Spirit was rejected on Tuesday.