“There is confidence”
Fading interest rate concerns fuel Wall Street
08/10/2022 10:27 p.m
US inflation falls more than experts expected. Investors on Wall Street are trying to seize the moment. The leading indices are rising accordingly.
US investors reacted with great relief to the declining inflation rate. The leading index Dow Jones Industrial rose by 1.63 percent to 33,309.51 points. The market breadth S&P 500 gained 2.13 percent to 4210.24 points. The technology-heavy and interest-sensitive index posted an even stronger increase of 2.85 percent to 13,378.32 points Nasdaq 100.
Investors’ fears of another XXL rate hike by the US Federal Reserve eased significantly. Unusually large rate hikes by the Fed had recently weighed on the stock exchanges and fueled fears of a recession. In Germany, too, investors reacted confidently and grabbed securities. “Inflation is still very high at 8.5 percent, but there is confidence that June may have been the peak,” said Charles Schwab’s vice president of trading and derivatives, Randy Frederick.
However, he warned that July producer price data and August inflation and employment data are due next Thursday before the next Fed meeting. Only then will the central bank set its course. “The signs of slowing inflation give hope that the Federal Reserve’s rate hikes may not have to go as far as previously thought,” said Mike Owens, trader at Saxo Markets.
The bets on a third interest rate hike by the US Federal Reserve by 0.75 percent in September ebbed significantly. Investors are now increasingly expecting a more moderate step of 0.5 percent. The rate of inflation fell to 8.5 percent in July and was therefore stronger than experts had previously expected. In June, US inflation was 9.1 percent, the highest level in more than 40 years.
The weakened interest rate prospects also put the on the foreign exchange market dollar negative pressure. The dollar index slipped 1.1 percent to 105.10 against a basket of major currencies. Of the Euro gained 0.9 percent to $1.0301. However, economists warned that the specter of inflation has not yet been banned. According to the experts at Commerzbank, one can breathe a sigh of relief after today’s data. “But the inflation problem is likely to prove very persistent.”
With the individual values stood Tesla in the spotlight after CEO Elon Musk sold shares in the electric car maker for almost $7 billion. According to Musk, the money will be used to take over Twitter if he loses the legal battle with which the short message service still wants to force the $44 billion takeover. Preparing a “war chest” for the Twitter acquisition protects against the need for a flash sale later, said Matt Britzman, an analyst at Hargreaves Lansdown. Tesla shares rose 3.9 percent; the papers of Twitter attracted a peak of 3.6 percent.
For the metroThe stock was higher in after-hours trading on Wednesday. The group earned more from operations and increased sales in the third quarter of the financial year, but the bottom line is that it slipped into the red. Reasons included a burden on the net financial result due to volatile exchange rates in the ruble during the Russia-Ukraine war, as the Düsseldorf-based wholesale group had already announced in July. According to the announcement, there were also effects from the sale of the Belgian business. These totaled more than 400 million euros. Without this, Metro AG would have posted a net profit. Metro sees itself on course for the forecast for the full year 2021/22, which has been updated since the beginning of July. The share was rated 1.5 percent higher at Lang & Schwarz.
On the other hand, it went for them west wing-Share down 3.5 percent. The online furniture retailer is dropping its annual forecast because of the deteriorating environment. In the third quarter, the gross merchandise volume (GMV) has already fallen by a tenth compared to the previous year, the company said. Sales in the second half of 2022 are likely to be below those of the previous year.