Dow Jones slightly in the red
US investors like McDonald’s new donut deal
March 26, 2024, 10:08 p.m
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US investors are eagerly awaiting the upcoming data on personal consumer spending in the US – the Fed’s preferred measure of inflation. The leading index therefore hardly changes. But Wall Street had three big winners that day.
Wall Street closed with slight price discounts ahead of the publication of important economic data. The Dow Jones Index the standard values fell 0.1 percent lower to 39,282 points from trading. The technology-heavy one Nasdaq fell 0.4 percent to 16,315 points. The broad one S&P 500 lost 0.3 percent to 5203 points.
Stock marketers were now eagerly awaiting Friday’s data on personal consumer spending in the USA – the US Federal Reserve’s preferred measure of inflation. They hope that this will provide information about the timing of the first interest rate cut by the monetary authorities. Central banks are trying to combat high inflation by increasing interest rates. Last week, Fed Chairman Jerome Powell’s promise of three interest rate cuts this year fueled the stock market rally. Other central bankers have now expressed more caution.
The experts were also cautious. “Powell came across as pretty ‘dovish’ overall, and so I understand why the market responded positively,” said Crit Thomas, a strategist at mutual fund firm Touchstone. “But I don’t think we’ve solved the problem of high inflation yet.”
TMTG gets off to a dream start
On the futures markets, the probability of the Fed’s first monetary policy easing at its meetings in June and July is currently estimated at just under 70 and a good 80 percent. Falling interest rates in the further decisions of the central bankers are more or less a foregone conclusion.
The spotlight among the individual stocks was on the stock market debut of former US President Donald Trump’s media company. The shares were placed at $49.95 Trump Media & Technology Group (TMTG) rose as much as 59 percent to $79.38 on its first day of trading. The share closed at $57.99, which corresponds to a premium of around 16 percent. TMTG had merged with SPAC (Special Purpose Acquisition Company) Digital World to use it as an IPO vehicle.
Investors also liked the expansion of a partnership between Krispy Kreme and MC Donalds in the USA. The donut chain’s shares jumped around 39 percent. McDonald’s will offer its products in all of its 14,000 restaurants in the USA from the second half of 2024 to the end of 2026, the companies said. Both companies had previously tested the program at 160 US locations as part of their partnership that began in October 2022.
Krispy Kreme CEO Josh Charlesworth said the partnership will double the company’s number of points of sale by the end of 2026. Krispy Kreme had been working to expand its distribution without driving up supply chain costs.
The shares of the electric car manufacturer went against the general market trend Tesla with an increase of around three percent. Tesla is offering US customers a trial version of its new driver assistance technology. Investors also covered the papers of chip manufacturers such as Marvell and Micron one that climbed by a good three and a good one percent.
The experts pointed to positive economic prospects and the expectation of long-term falling interest rates from the US Federal Reserve to explain the price gains. “Everything seems to be going in the direction we want,” said Sam Stovall, chief strategist at CFRA Research. “We are not in recession, interest rates are likely to fall, corporate balance sheets look good and tensions in the Middle East have not escalated.”
The prospect of surprisingly strong sales UPS initially allowed investors to take advantage. The shares of the world’s largest parcel service rose by around two percent before the US stock market opened. However, after trading started, they lost more than eight percent. The US group is targeting sales of between $108 and $114 billion for 2026, exceeding the average analyst forecast. “The price decline suggests that the outlook was either slightly below investors’ expectations or that the market does not believe in this forecast at all,” said analyst Matthew Young from the analysis firm Morningstar.