Losses made up
Tech stocks pull Wall Street up
17.06.2024, 22:40
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In nervous trading, investors on Wall Street are once again following the rally in technology stocks. Two indices are starting the week at record highs. Further indications that the US Federal Reserve is only aiming for one interest rate cut this year are hardly impressive.
Wall Street has more than made up for its losses from Friday at the start of the week, even though interest rate optimists, who continue to speculate on two interest rate cuts this year, were dealt a further blow and market interest rates rose. Investors were unimpressed by this, however, and boldly bought into technology stocks in particular. The upcoming publication of the much-watched data on retail sales and industrial production on Tuesday did not cause investors to hold back either.
The US Federal Reserve recently signalled only a rate cut. This view was confirmed by Neel Kashkari, president of the Fed branch in Minneapolis. He said that the US Federal Reserve will probably wait until December to cut rates. The Fed can take its time and wait for data on inflation and the labour market “before we have to make a decision”. The President of the Philadelphia Fed, Patrick Harker, expressed a similar view. He expected only one rate cut this year.
The Dow Jones Index gained 0.5 percent to 38,779 points, the S&P 500 rose by 0.8 percent to a new all-time high. Goldman Sachs had raised the year-end target for the S&P 500 to 5,600 points from 5,200. The Nasdaq Composite climbed by around 1 percent and also marked a record high. There were 1,620 (Friday: 755) price winners and 1,187 (2,057) losers. 65 (69) stocks closed unchanged.
Business activity in the New York metropolitan area remained subdued. However, the Empire State Manufacturing Index rose more than expected in June. In this respect, the data provided little impetus. On the interest rate futures market, the probability of a first interest rate cut in September was around 66 percent, around 2 percentage points lower than on Friday. “The Fed may not have to cut interest rates this year, but if it does, it will be even more bullish for stocks – especially technology stocks,” said chief market strategist James Demmert of Main Street Research, referring to the high valuations on the stock market, which he considers to be “appropriate” in most cases.
Yields are stabilising
In line with the central bankers’ statements, the bond market saw Returnsbut these had recently fallen significantly. With the better-than-expected data from New York, yields rose a little. The renewed willingness of investors to take risks and the strong price gains on the stock markets dampened interest in “safe havens,” it was said. The dollar also fell slightly, as it was not in demand as a safe haven currency.
With rising market interest rates, the Gold price. Oil prices, on the other hand, rose significantly, but according to traders this was mainly due to technical reasons.
Autodesk increases
Among the individual values, Autodesk by 6.5 percent. The Wall Street Journal reported that the hedge fund Starboard Value holds a stake of around 500 million dollars in the manufacturer of design software and is pushing for changes. The upward trend continued for Broadcom (+5.4%). This marks the seventh consecutive increase in the chip and software manufacturer’s share price. The previous week, Broadcom announced a 1:10 stock split.
BestBuy gained 4.6 percent after the electronics retailer was upgraded to “buy” by UBS. After a downgrade to “sell” by Goldman Sachs, the building materials manufacturer’s share price fell Louisiana Pacific by 3.5 percent.
The Meme Stock GameStop dropped by 12.1 percent. The annual general meeting, which was cancelled last week due to a technical problem and continued on Monday, was carried out quite quickly, it was said. Little space was given to questions from investors. General counsel Mark Robinson avoided questions about the company’s business performance and future and quickly ended the question and answer session.
You can find out more about today’s stock market events here.