Dow Jones closes in positive territory
Falling inflation gives investors a sigh of relief
01/12/2023, 11:12 p.m
Inflation in the US is gradually subsiding. However, the data does not ensure complete relaxation on Wall Street. It is possible that the US Federal Reserve will step on the brakes when interest rates are raised. However, there is no sign of a break from the rigid interest rate policy.
After the rollercoaster ride in early trading, the US stock markets turned positive again. Investors tried to interpret the freshly released December US inflation data. the Dow Jones Index the standard values rose 0.64 percent to 34,189.97 points. The broader one S&P 500 and the Index of the Technology Exchange Nasdaq gained 0.34 and 0.64 percent to 3,983.17 and 11,001.1 points, respectively.
Inflation continued to weaken as expected, although investors were not expecting an upside surprise of an even sharper decline. Goods and services inflation fell to 6.5 percent in December from 7.1 percent in November. “The number is definitely going in the right direction, but not very fast. So the battle between the bulls and the bears continues,” said Dennis Dick, analyst and trader at broker Triple D Trading. According to investment expert Mike Loewengart from Morgan Stanley, it is not impossible that the US Federal Reserve will take its foot off the gas when it comes to raising interest rates. However, today’s figures do not point to a break.
Decline in US inflation and hopes of an economic recovery in China also supported oil prices. The North Sea variety Brent and the light US variety STI gained 0.2 and 1.14 percent, respectively, to $83.86 and $78.29 per barrel (159 liters). “A softer landing in the US and perhaps elsewhere, combined with a strong rebound in China following the current Covid wave, could make for a much better year than feared and spur additional demand for crude oil,” said strategist Craig Erlam of broker Oanda .
Tesla expansion delayed
Tech stocks like Microsoft, Intel and the graphics card manufacturer Nvidia increased by up to 3.2 percent. According to experts, rising inflation and higher interest rates will devalue future profits from these high-growth companies. the Walt Disneyshares gained 3.56 percent to $100.42. Investor Nelson Peltz wants to become a member of the board of directors of the entertainment group. The head of the New York hedge fund Trian is known for pushing for change at companies in which he has a stake.
At the same time, a media report on delays in the expansion of Tesla in China, the shares of the electric car maker meanwhile fell by almost two percent, but in the end they rose by 0.3 percent to $ 123.56. Meanwhile, the appointment of Ravi Kumar as CEO boosted shares in the US IT service provider cognizant. The papers rose by 5.79 percent to 65.1 dollars – the highest price level in five months. The former president of competitor Infosys replaces Brian Humphries with immediate effect after almost four years at the helm of the company.