Confidence ahead of Fed final decision
Nasdaq climbs 14-month high
06/12/2023, 11:13 p.m
It’s central bank week, and several of them will be commenting on their monetary policy over the next few days. As for the Fed, investors are anticipating a rate pause. This is fueling above all the interest-sensitive technology stocks on the Nasdaq.
The US stock exchanges continued to rise ahead of the forthcoming inflation figures and interest rate decisions by several central banks. The leading index Dow Jones gained 0.6 percent to 34,066 points. The broad one S&P 500 advanced 0.9 percent to 4338 jobs and the tech-heavy Nasdaq 1.5 percent to 13,461 points. For both, this meant the highest closing level since April 2022.
Investors were confident ahead of Tuesday’s US inflation numbers. Stockbrokers expected inflation to cool down slightly in May and the US Federal Reserve to leave interest rates in the range of 5.0 to 5.25 percent on Wednesday. That would be the first pause in the Fed’s rate-hiking cycle since January 2022. “The Fed continues to walk the fine line between tightening too much, pushing the economy into recession, and tightening too little, leaving inflation at elevated levels holds,” said Melissa Brown of financial market service provider Qontigo. The prospect of an imminent end to the Fed’s tightening cycle and strong quarterly figures have boosted indices in recent weeks. The ECB as well as the Japanese and Chinese central banks also want to comment on their monetary policy in the next few days.
Oil price under pressure
On the other hand, the price of oil continued to fall. Brent from the North Sea and US light oil STI became cheaper by almost four percent to 71.90 and 67.15 dollars per barrel (159 liters). Because of the recent disappointing economic data from China, most investors feared falling demand, said a broker. The planned cuts in production volumes by the major oil exporting countries currently play only a minor role. Goldman Sachs lowered its forecast for the price of crude oil on Monday, citing oil supplies from Russia and Iran that were well above expectations. For December, the experts at the investment bank see the price for a barrel of Brent oil at just 86 dollars instead of the previous 95 dollars.
Nio scores with price reduction
Meanwhile, the announcement of price reductions for all models left investors with the Chinese electric car manufacturer, which is also listed in the USA noo bet on rising demand. The entry into the price war instigated by the electric car manufacturer Tesla temporarily drove Nio’s shares up by 8.7 percent. Tesla themselves increased by 2.2 percent and thus rose for the twelfth trading day in a row. There had never been such a long period of exclusively positive signs for the papers.
biogenic up 1.5 percent after an FDA advisory board voted in favor of approving an Alzheimer’s drug that the US biotech company is developing with its partner Eisai. Oracle rose in the run-up to the presentation of the quarterly figures by six percent to around 116 dollars. The analysts at JPMorgan had raised the target price from $93 to $109.
Against it broke Nasdaq stocks by 11.8 percent. The operator of the US technology exchange of the same name announced that the software company adenza to take over for $10.5 billion. Investors spoke of a high purchase price.