Dow Jones closes in positive territory
Fear of interest rates dampens buying mood among investors
09/07/2022 10:29 p.m
The Fed is expected to raise rates further. Stockbrokers are therefore only hesitant to access them. Meanwhile, economic pessimism persists. It is particularly evident in the commodity market. The US crude oil type WTI has become drastically cheaper, while the dollar index has increased significantly.
After the recent slide in prices, investors are taking the opportunity to re-enter the US stock market. However, the uncertainty about the speed of the expected US interest rate hikes dampened the buying mood. The default index Dow Jones rose 1.4 percent to 31,581.28 points. The broad one S&P 500 and the tech-heavy Nasdaq with a plus of 1.83 and 2.14 percent respectively to 3979.87 and 11,791.90 points also to. In the previous weeks they had lost a total of around ten percent.
On the foreign exchange market marked the dollar indexwhich tracks rates against major currencies, hit 110.79, a 20-year high for the fourth time in five days, before taking profits to 109.59 digits pressed. “I wouldn’t be surprised if the Fed was worried about the currency’s performance,” said analyst David Madden of brokerage firm Equiti Capital.
The appreciation of the dollar could have a negative impact on exports. So far, stockbrokers are firmly expecting the US Federal Reserve to raise interest rates by 0.75 percentage points for the third time in a row at its meeting at the end of the month. Rising bond yields in tandem with higher interest rates have made this asset class a competitor for stocks, interjected portfolio manager Paul Nolte of wealth manager Kingsview. As long as this trend continues, Dow, S&P & Co would have a hard time with larger price increases.
Apple in the spotlight
Economic pessimists were in the majority among commodity investors. “The prospect of a recession in the western world is becoming a reality as runaway inflation and rising interest rates hurt consumption,” warned analyst Stephen Brennock of brokerage house PVM Oil Associates. Disappointing economic data from China also weighed on the mood. “The decline in exports and imports demonstrates the vulnerability of the global economy and the scope of the corona shock,” said analyst Danni Hewson from brokerage house AJ Bell. The US crude oil variety STI then fell by more than five percent to around $82 a barrel (159 liters).
At the companies advanced Apple into the limelight. Among other things, the electronics group presented its new iPhone 14. “But the big question is how many buyers it will find,” said Naeem Aslam, chief market analyst at brokerage firm AvaTrade. “After all, everyone is grappling with the rising cost of living. Not many will want to shell out more than $1,000 while worrying about rising mortgage rates and energy bills.” Apple shares barely moved, rising just under a percent to 155.96 points.
Investors bravely grabbed the titles of coupe to. They rose by almost 18 percent at the top, as strong as two and a half years ago. Analyst Matt VanVliet from brokerage house BTIG praised the company software provider’s quarterly results across the board. However, the view was a bit disappointing.