Dow Jones closes in positive territory
Investors hope for resilient US economy
08/28/2023, 10:17 p.m
The prospect of a moderate interest rate policy by the US Federal Reserve makes stockbrokers on Wall Street optimistic. They rely on a robust economy. They look forward with hope to the publication of consumer spending and job data in the coming days.
In the run-up to important inflation and economic data, investors on Wall Street started the week optimistically. The Dow Jones Index the default values and the broader one S&P 500 each increased by around 0.6 percent to 34,559.98 and 4433.31 points. The index of the technology exchange Nasdaq climbed slightly more sharply to 13,705.13 points. Investors were waiting for more clues about the Federal Reserve’s next move, said Peter Andersen of Andersen Capital Management.
Investors were hoping for this from Thursday’s price index for private consumption, the Fed’s preferred inflation indicator. Further indications of the resilience of the US economy could be provided by the US jobs data due on Friday.
At the central bank forum in Jackson Hole on Friday, Fed Chair Jerome Powell promised that the central bank might raise interest rates even further in the fight against inflation, but that it would do so cautiously. “He gave some hope to the moderate side by acknowledging that current policies are restrictive and could carry over time,” said David Russell, market strategist at Trade Station. “But he also threatened to drop the hammer again if the economy and job market got too hot.”
Positive impetus came from China, where the government launched a campaign on Sunday to boost the flagging stock market and boost investor confidence in the struggling economy. The measures include, for example, halving the so-called stamp duty on stock trading. At the same time, the authorities approved the introduction of 37 private customer funds. Home loan guidelines have also been relaxed. This had already provided tailwind in Europe and caused the leading German index Dax to rise by one percent to 15,793 points.
Rosy prospects drive 3M and Horizon
In terms of individual values, the shares jumped by 3M up 5.45 percent. A media report about a possible settlement of a lawsuit with the US military pushed the maker’s stakes in duct tape, Post-It notes, power tools and medical products. The US company has tentatively agreed to pay more than $5.5 billion to settle lawsuits over the alleged delivery of defective hearing protection to the US military. The Bloomberg news agency reported on Sunday evening, citing people familiar with the matter.
Brighter prospects for the controversial takeover of the US pharmaceutical company Horizon Therapeutics let the share rise by 5.14 percent. The US competition authority suspended its blocking of the planned purchase by rival Amgen until September 18. Amgen said it will meanwhile prove to the courts that there is no reason to prohibit the acquisition.
Shares also fell by 1.82 percent Goldman Sachs after the investment bank announced it had sold an investment advisory unit to wealth management firm Creative Planning. The Wall Street bank did not disclose a sale price but said the transaction is expected to close in the fourth quarter and result in a profit.