Interest rate hopes remain
Wall Street is weathering the downturn well
April 11, 2024, 10:29 p.m
Listen to article
This audio version was artificially generated. More info | Send feedback
Further economic data and central bank statements are making investors on Wall Street nervous. But after the massive price slide from the previous day, a little confidence is returning. The interest rate turnaround will finally come at some point.
By the evening, Wall Street had recovered from the previous day’s decline. Especially the technology-heavy one Nasdaq took off more clearly – supported by Apple. The Dow Jones Index stagnated at 38,459 points, S&P 500 and Nasdaq Composite gained 0.7 and 1.7 percent, respectively. There were 1,448 (Wednesday: 409) price winners and 1,379 (2,445) losers on the Nyse. 68 (36) titles closed unchanged.
The day before, inflation data that was higher than expected had caused significant selling pressure. Expectations of an imminent interest rate cut by the US Federal Reserve suffered another massive setback and were priced out. Market interest rates had risen significantly accordingly.
There was now talk of an exaggerated market reaction in trading: “In particular, the sharp rise in bond yields seemed completely crazy since Wednesday’s inflation data was only slightly higher than expected,” said President David Rosenberg of Rosenberg Research. John Williams, President of the New York Fed branch, rekindled investors’ courage when it came to interest rate cuts: He continued to expect a gradual decline in inflation, but the path was unlikely to be easy. This was accompanied by producer prices that were slightly lower than expected.
The President of the Boston Fed, Susan Collins, made it clear that interest rate cut hopes had been exaggerated since the beginning of the year. Fewer rate cuts than expected may be warranted this year. The data reduced the “urgency” of rate cuts, Collins said.
Yields continue to rise
At the Bond market Yields were volatile after the previous day’s rally and rose slightly at the end – supported by better-than-expected weekly labor market data. At the Foreign exchange market The dollar continued to rise in market interest rates after the previous day’s strong premiums, while the dollar index remained at the previous day’s high level. The day before, the massive rise in market interest rates gave the dollar a strong tailwind. However, weaker producer prices slowed things down. The euro weakened somewhat with statements from ECB boss Christine Lagard that were interpreted as dovish.
The Oil prices noted easier. So far, the feared direct confrontation between Israel and Iran has not materialized. Weather-related outages at refinery plants in Texas had a dampening effect on prices because oil demand there is likely to decline. The OPEC oil cartel maintained its estimate for global oil demand growth this year, but lowered its forecast for non-OPEC supply growth for this year and next. The Gold price recovered from the previous day’s setback – fueled by weaker producer prices.
Boeing in descent
Boeing An internal audit found that CEO David Calhoun and other executives took more than $500,000 in personal trips on the company’s private jets and other aircraft that were improperly billed as business trips. The price fell 0.7 percent.
Apple According to an agency report, is preparing to equip its Mac series with new in-house processors. The price rose by 4.3 percent. Nike rose 3.4 percent after an upgrade by Bank of America to “buy.” Amazon (+1.7%) climbed to an all-time high – CEO Andy Jassy had expressed optimism about the retailer’s AI strategy.
Constellation Brands climbed by 1.3 percent after positive business figures. The spirits supplier beat market expectations in the fourth quarter. CarMax fell by 9.3 percent; the car dealer had missed the market’s estimates in the fourth period.
Several US federal agencies take Morgan Stanley because of possible money laundering among customers, the rate fell by 5.2 percent. Vertex Pharmaceuticals increased by 0.7 percent. The US biotechnology company wants to take over Alpine Immune Sciences for $4.9 billion in cash. The Alpine shares The share price then jumped by around 36.8 percent.