Just a little movement
Prospect of inflation report inhibits Wall Street
April 9, 2024, 11:34 p.m
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The US stock markets will also close on Tuesday without any real change. The Dow Jones is barely moving, the Nasdaq and the S&P 500 are barely moving. The reason for this is the US inflation report coming out on Wednesday. Investors are hoping for clues about the Fed’s future interest rate policy.
Wall Street was little moved on Tuesday ahead of the highly anticipated US inflation report. The Dow Jones Index the standard values closed little changed at 38,883 points. The technology-heavy one Nasdaq advanced 0.3 percent to 16,306 points. The broad one S&P 500 gained 0.1 percent to 5209 points. Investors are hoping that Wednesday’s data on inflation in the US in March will provide information about the US Federal Reserve’s future monetary policy course.
The monetary authorities are trying to use high interest rates to bring inflation down to their target of two percent without strangling the economy. However, according to experts, the inflation rate could rise to 3.4 from 3.2 percent in February. “Right now, three rate cuts this year seem like a bit too much to ask for,” said Dave Grecsek, manager at asset manager Aspiriant. The latest strong economic data also suggests that the Fed’s long-awaited interest rate turnaround may not materialize for the time being.
Investors have already scaled back their expectations. On the futures markets, the probability of the Fed’s first monetary policy easing in June and July is currently estimated at around 55 and 75 percent. Just a few weeks ago they were considered more or less a foregone conclusion. However, investors still see falling interest rates at the Fed meetings in September, November and December as very likely. Meanwhile, investors’ speculation about a ceasefire in the Middle East depressed prices on the oil market. The North Sea Brent crude oil and the US variety WTI prices fell by around one percent to $89.44 and $85.27 per barrel (159 liters).
The background was the ongoing negotiations between Israel and Hamas over a ceasefire in the region, which is important for oil production. These eased investors’ concerns that there could be a supply shortage if the war escalated. The experts are cautious. “Unless the Middle East conflict finally comes to an end, there will be a risk that other countries – particularly major oil producer Iran – could be drawn into the war,” said Fiona Cincotta, an analyst at brokerage City Index.
Moderna is gaining ground
In terms of individual values, positive study results for a new cancer vaccine drove Moderna the stock. The US pharmaceutical company’s shares were trading 6.2 percent higher. A combination of Moderna’s mRNA-based vaccine with the US pharmaceutical company Merck & Co’s cancer drug Keytruda has proven effective in an early clinical trial. Strong delivery figures boosted the shares of the US electric car manufacturer Lucid, which rose by 2.3 percent. Tesla’s rival delivered vehicles in the first quarter of 1967.
The experts had expected an average of 1,745. Lucid lowered prices for its most important model, the Air, by one to ten percent in February. The background was weak demand in the sector. “I expect that they will continue to increase their production and sales throughout the rest of the year – thanks, among other things, to their plans for more deliveries to Saudi Arabia,” said Andres Sheppard, chief analyst at US financial services provider Cantor Fitzgerald.
A disappointing forecast, however, caused the shares of the US cannabis provider Tilray to collapse. The papers lost more than 20 percent. The consumer goods, alcoholic beverages and medical cannabis maker no longer expects to generate positive cash flow in 2024. The background was a delay in payments for several asset sales.