Intel shares are recovering
Wall Street gains ahead of Fed decision
January 29, 2024, 11:11 p.m
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Investors are eagerly awaiting the US Federal Reserve’s interest rate decision on Wednesday. It is a given that the Fed will leave interest rates unchanged again. Investors are hoping that Central Bank Chairman Powell’s appearance will provide an indication of when the interest rate turnaround can be expected.
Before the US Federal Reserve’s first interest rate decision this year, investors on Wall Street took action. The Dow Jones Index the standard values closed 0.6 percent higher on Monday at 38,333 points. The technology-heavy one Nasdaq advanced 1.1 percent to 15,628 points. The broad one S&P 500 increased 0.8 percent to 4927 points.
US investors were eagerly awaiting central bank chief Jerome Powell’s press appearance in the middle of the week, from which they hoped to provide information as to when the interest rate turnaround longed for by the financial markets could be expected. On the other hand, they thought it was a foregone conclusion that the Fed would leave interest rates unchanged for the fourth time in a row. In order to get inflation under control, the US monetary authorities had previously raised interest rates in sometimes aggressive steps.
In the run-up to the Fed’s decision, the Dollar index by up to 0.3 percent to 103.82 points. The Euro However, at the start of the week it fell by 0.5 percent to $1.0794. “The macroeconomic picture in the United States looks much better than the macroeconomic picture in European Union countries and the euro zone in general,” said Helen Given, a foreign exchange trader at Monex USA.
US tech giants in focus
At the same time, US investors were preparing for a flood of company balance sheets. Technology giants such as Microsoft, Meta and Apple open their books over the course of the week. “From Tuesday to Thursday alone, companies in the USA open their books that make up over 40 percent of the market capitalization of the Nasdaq 100,” said Jochen Stanzl, chief analyst at broker CMC Markets. “Volatility is almost guaranteed in such an environment.”
After plunging by around twelve percent at the end of the week, Intel shares recovered slightly by 0.5 percent on Monday. A disappointing forecast from the US chip company recently spooked investors and called the previous tech rally into question. “Earnings probably don’t justify current trading levels, but when you factor in interest rate cuts, you feel reasonably good about the market and are optimistic that the rally can continue,” said Robert Pavlik, portfolio manager at Dakota Wealth. The world’s largest asset manager BlackRock has meanwhile raised its overall rating for US stocks to “overweight” from “neutral”.
iRobot is going under the wheels
In terms of individual stocks, iRobot’s shares initially fell by almost 19 percent after the provider of “Roomba” vacuum cleaner robots and Amazon abandoned their merger plans in the face of resistance from the EU antitrust authorities. During trading, iRobot limited its losses and exited trading with a discount of 8.8 percent. Amazon shares rose by around one percent.
Some chip stocks recovered: Micron Technology, Broadcom and Nvidia gained between 1.1 and 2.3 percent after heavy losses last week. Meta Platforms rose 1.7 percent after brokerage firm Jefferies raised its price target.