Minus after ascent and descent
Wall Street is nervously looking to the Middle East
April 15, 2024, 11:07 p.m
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The Middle East crisis and dwindling hopes of a turnaround in interest rates are causing US indices to slide into the red. Goldman Sachs leaps forward, Tesla flies out of the depots.
The US stock exchanges closed in the red in the evening after a rollercoaster ride. Traders referred to the crisis in the Middle East. “The whole geopolitical thing is going to create tension and fear in the market and the realization that interest rates are not going to go down anytime soon needs to finally sink in because that’s what the bond market is saying, that interest rates are going to go up,” explained one market participant.
Surprisingly strong US retail sales and a jump in profits at Goldman Sachs prevented major discounts. However, in view of a possible retaliation by Israel for the Iranian attack, stockbrokers remained on guard. The Dow Jones Index the standard values fell 0.7 percent lower to 37,735 points from trading. The technology-heavy one Nasdaq fell 1.8 percent to 15,885 points. The broad one S&P 500 lost 1.2 percent to 5061 points.
Fresh evidence of the resilience of the US economy was provided by US retail sales, which rose surprisingly sharply in March despite stubbornly high inflation. “Given the high consumer price index we had last week, the economic data points to a strong economy with inflation and that does not fit well with the revised thinking on rate cuts,” said Andre Bakhos of Ingenium Analytics.
Goldman Sachs shines with profits
The US investment bank scored highly when it came to individual stocks Goldman Sachs with a jump in profits among investors. The shares of the leading US investment bank rose by around three percent after profits rose by 28 percent in the first quarter, mainly thanks to flourishing business in investment banking. Most profit drivers performed better than expected, the analysts at Oppenheimer stated. This was an “almost perfect” result. Goldman Sachs advised some of the largest mergers and acquisitions of the past year, including the takeover of the US oil company Pioneer Natural Resources by its competitor Exxon Mobil for $59.5 billion.
The titles of the US brokerage house Charles Schwab climbed by almost two percent. Thanks to higher fees for asset management, the US group’s income exceeded expectations. The upswing in the markets has driven up the valuation of assets under management, resulting in higher fees. Total customer assets climbed 20 percent to a record $9.1 trillion.
Investors objected Tesla shares from their depots. The US electric car manufacturer is cutting more than one in ten jobs worldwide due to weaker demand for its vehicles. Tesla boss Elon Musk announced the job cuts in an internal communication seen by Reuters. Tesla shares lost 5.6 percent.