Dow Jones closes in positive territory
Declining inflation puts investors in a good mood
01/27/2023, 10:20 p.m
The car manufacturers Tesla and Lucid can look forward to substantial price gains. Sentiment on Wall Street is brightening overall, as the view of the weakening economy raises hopes that the US Federal Reserve will ease its interest rate policy.
Easing inflation concerns and investors’ joy at the ringing coffers of the major credit card providers have supported the US stock exchanges. On the other hand, a fall in the price of the chip manufacturer Intel depressed the mood after a disappointing outlook, while the electric car manufacturer Lucid caused a sensation with a price explosion. the Dow Jones Index and the broader one S&P 500 were 0.08 and 0.25 percent higher at 33,978.01 and 4070.55 points. The index of the technology exchange Nasdaq stood around one percent higher at 11,621.17 points.
Weakening inflation is currently providing a ray of hope on the stock exchanges, fueling hopes of an end to the US Federal Reserve’s aggressive rate hikes. The personal consumption expenditure (PCE) index, the Fed’s preferred measure of inflation, showed a 0.1 percent rise last month after a similar rise in November. Meanwhile, US consumer spending fell for the second straight month. “The Fed must act cautiously given the deteriorating economic outlook,” said Christopher Rupkey, economist at trading house FWDBONDS. With a view to the Fed meeting on Wednesday, analysts are currently expecting a rate hike of 25 basis points.
Tesla was able to continue its old glory days as an investor’s favourite. After the positively received figures from the electric car manufacturer, private investors jumped on the moving train and, according to Vanda Research, set a new daily record for purchases of the share. Tesla shares jumped 10.99 percent to $178.87, the highest in more than a month and a half. On a weekly basis, Tesla was heading for an increase of around 33 percent.
There was also a price explosion at the rival Lucid, whose shares soared more than 44 percent to $12.96. Market participants attributed the jump to speculation that Saudi Arabia could buy the remaining shares in Lucid. These can be traced back to a report on a website that was described as a market rumour. The Saudi state investment fund PIF already owns more than 65 percent of Lucid. The parties involved declined to comment. US credit card issuers Visa and American Express (Amex) shone with better-than-expected earnings growth and an upbeat outlook. Visa shares gained three percent, Amex gained more than twelve percent.
intel-Shares plunged 6.41 percent after the company posted its worst sales slump in at least two decades and warned of further falls due to weak PC demand. A record profit handed to the investors chevrons not from. Oil company shares fell 4.27 percent to $179.78. Although profit more than doubled to $36.5 billion in 2022, it fell short of stock marketers’ expectations due to asset write-downs and the decline in oil and gas prices. Year-end, all four reporting segments showed earnings declined from record levels set in the second and third quarters of 2022, said Third Bridge analyst Peter McNally.
Also shares of the US tire manufacturer Goodyear lost 3.65 percent. The group is cutting five percent of its jobs worldwide to counteract the high cost pressure. However, this also incurs financial burdens of around $55 million. In the fourth quarter, business fell short of expectations, said boss Richard Kramer.