Intel on the rise
Wall Street takes a breather after interest rate rally
23.09.2024, 22:33
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The joy over the XL interest rate turnaround is short-lived. Analysts are already asking whether the Fed is not coming too late. Initial speculation is circulating that another major interest rate hike might be necessary to ensure a soft landing for the US economy.
Wall Street closed the week with a slight gain. The Dow Jones Index reached a new record high of 42,190 points. The Dow was driven primarily by Intel shares, which rose by a further 3.3 percent on ongoing takeover speculation. Market participants spoke of a breather after last week’s interest rate cut rally. After the US Federal Reserve had cut its key interest rate by half a percentage point, the Dow Jones Index and the S&P 500 climbed to new record highs. The Dow Jones Index gained 0.1 percent to 42,125 points. The S&P 500 increased by 0.3 percent and for the Nasdaq Composite rose by 0.1 percent. There were a total of 1578 (Friday: 963) price winners and 1237 (1806) losers. 51 (90) titles closed unchanged.
Following the US Federal Reserve’s interest rate turnaround, the markets continue to ask whether the US economy will manage a “soft landing” and whether inflation will remain contained. According to a survey by S&P Global, growth in activity in the US economy slowed somewhat in September. The composite index for production in the private sector – industry and services combined – fell to 54.4 from 54.6 points in the previous month.
The data indicate “another sluggish increase in employment in September,” said Samuel Tombs of Pantheon. The data also indicated a cooling of inflation, the participant added. The Chicago Fed National Activity Index for August, however, rose to plus 0.12 (July revised: minus 0.42). Minus 0.32 points had been reported for July.
The president of the Federal Reserve in Chicago, Austan Goolsbee, spoke out in favor of further interest rate cuts. Interest rates must fall so that the economy can have a “soft landing,” he said. Inflation has fallen significantly, the labor market is trending weaker, but interest rates are still close to the highest level in 20 years, even after the half-percentage point rate cut last week.
Intel again with premiums


Among the individual values, the Intel shares which further extended its gains from Friday. According to a report by the news agency Bloomberg, Apollo Global Management (+0.6%) offered to invest up to 5 billion dollars in the chip manufacturer. On Friday, the Wall Street Journal reported that Qualcomm (-1.8%) recently approached competitor Intel about a possible takeover. Intel shares rose by around 3 percent at the end of the week. However, a takeover of Intel by Qualcomm is unlikely to be approved by regulators, noted Stifel analyst Ruben Roy.


Tesla increased by 4.9 percent. Barclays analysts expect deliveries of around 470,000 vehicles for the third quarter, compared to the consensus forecast of around 460,000. For the shares of Boeing rose by 2.0 percent. The company has presented a new offer to the striking employees’ union. The US aircraft manufacturer hopes to end the work stoppages, which are costing the cash-strapped company hundreds of millions of dollars every week.
Dollar slightly stronger – oil prices fall
On Foreign exchange market The dollar was somewhat firmer. The dollar index rose by 0.1 percent. The euro, however, fell by 0.4 percent to 1.1114 dollars after both the German and French purchasing managers’ indices were weaker than expected.
The Oil prices fell significantly after initial gains. The prices for WTI and Brent fell as much as 0.7 percent after gains in the previous week. Participants pointed to statements by Iranian President Masoud Pezeshkian on Monday before the UN. He had declared that Iran does not want a broader Middle East conflict. His comments came after Israel stepped up its attacks on the Iran-backed Hezbollah in Lebanon, which had boosted oil prices in early trading. On Bond market Yields rose moderately. The yield on ten-year bonds rose by 0.6 basis points to 3.75 percent. The published US economic data had little impact on the market, it was said.
The Gold price marked another record high at the start of the week. The troy ounce gained 0.2 percent to $2,627. The precious metal continued its rise after the start of the US Federal Reserve’s interest rate easing cycle, said Ricardo Evangelista, senior analyst at ActivTrades. The precious metal also benefited from its status as a “safe haven” against the backdrop of geopolitical and economic uncertainties, added Antonio Ernesto Di Giacomo, senior market analyst at XS.com.
You can find out more about today’s stock market events here.