Despite cautious investor sentiment
Dow hits new record high
December 15, 2023, 11:26 p.m
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Recent statements from Fed bankers are giving traders on Wall Street something to think about: Will there be any interest rate cuts soon? Despite the slightly clouded mood, the US indices continue to climb. The price of gold, on the other hand, is interrupting its recent rally.
The rally on Wall Street following the latest Fed decision has come to an end for now. The US leading index Dow Jones gained 0.2 percent to 37,305 points – a new record high. The technology-heavy one Nasdaq advanced 0.4 percent to 14,813 points and the broad S&P 500 closed barely changed at 4719 points. This was the third record close in a row for the Dow. On a weekly basis, all three indices were positive for seven weeks. This is the longest streak for the S&P since 2017.
New statements from US central bankers caused the gloomy mood. The current talks about interest rate cuts are “premature,” said Fed representative John Williams in an interview with the US broadcaster CNBC. Investors’ fantasies of interest rate cuts after the Fed meeting on Wednesday triggered a brief surge on the stock markets. The monetary authorities signaled that they are already considering downward steps for 2024. “After Powell’s turnaround party, we have now been shaken up by Williams,” commented Michael Hewson, chief analyst at broker CMC Markets. However, Art Hogan, chief strategist at asset manager B. Riley Wealth, remained calm: “It is not unusual for Fed spokespeople to try to suppress excessive reactions to a particular Fed meeting.
Gold on the ups and downs
The Dollar index was up around half a percent at 102,615 points after its recent losses. The Euro In return, it fell by 0.9 percent to $ 1.0891. Also the Gold price interrupted its recent rally. The yellow metal fell in price by 0.8 percent to around $ 2019 per troy ounce. “Gold has had a real rollercoaster ride this week,” said Hewson. “First the price fell to a four-week low before recovering strongly after Powell’s statements on Wednesday. Now Williams is dampening investor expectations.” Nevertheless, gold prices are likely to end the week higher. On Friday evening it was almost one percent above the previous week’s close.
The Oil prices However, they embarked on a cautious recovery course. The North Sea crude oil Brent and the light US grade WTI rose slightly to $76.76 and $71.59 per barrel (159 liters). They had previously fallen by up to 1.7 percent after a survey for US industry showed a decline in new orders. Investors interpreted this as an indication of weaker oil demand next year, said Phil Flynn, analyst at broker Price Futures. “The market is sensitive to every new headline. Investors are still unsure whether oil prices have bottomed out.”
The large expiry date was noticeable among the individual securities, at which prices usually fluctuate greatly because investors want to move the prices of the securities on which they hold derivatives in a direction that is favorable to them. On the so-called Witches’ Sabbath, futures and options on indices as well as options on individual stocks expire during the course of the day. Among other things, they were in demand Costco with a price increase of 4.4 percent. The US retailer reported quarterly figures above analyst expectations thanks to strong demand for low-cost food. Its sales rose 6.1 percent to $57.8 billion in the first quarter. Experts surveyed by LSEG assumed an average of 57.72 billion.
Investors also bought shares in the chip manufacturer Intel which increased by around 2.2 percent to $46.16. The experts at the analysis house BofA Global Research had set the stocks to “Neutral” from “Underperform”. The price target was also raised to $50 from $32. The background is, among other things, growth opportunities for Intel’s business with chips for vehicle sensors.