Inconsistent trend
Iranian-Israeli tensions weigh on Wall Street
April 19, 2024, 10:32 p.m
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It is not yet clear what will happen next after the recent escalation between Iran and Israel in the Middle East. This uncertainty also affects US stock markets. Major indices are falling, but the reaction on the foreign exchange market is muted. The big loser this time is Netflix.
The latest escalation in the conflict between Israel and Iran is causing a mixed trend on Wall Street at the end of the week. Israel has reportedly responded to last weekend’s Iranian attacks with a retaliatory strike. However, according to Iranian information, there was no significant damage, which eased the selling pressure on the stock exchanges. “Markets will be paying close attention to current headlines and trying to assess the risk of Iran-Israeli tensions escalating into a full-fledged conflict in the region,” ING analysts said.
The Dow Jones Index gains 0.4 percent to 37,920 points at noon (local time). On the other hand, it works for him S&P 500 and the Nasdaq Composite down by 0.6 and 1.4 percent respectively. The technology sector is also being burdened by the taxes on Netflix shares, which are falling by 8.6 percent. The streaming provider presented good results for the first quarter, but gave a pessimistic sales outlook for the current second quarter.
Economic data was not on the agenda on Friday, but Procter & Gamble and American Express, among others, published figures as part of the current accounting season. Procter & Gamble earned more than expected in the third fiscal quarter, but sales missed expectations. The consumer goods company raised its profit forecast and confirmed its sales target. The share price is down 0.9 percent.
American Express surprised positively with the quarterly figures. The profit was higher than analysts expected. The share gains 4.7 percent. The course of Paramount Global jumps up 8.5 percent. According to a New York Times report, Sony’s film studio division is negotiating with Apollo Global Management to bid for Paramount. The recall of around 3,900 Cybertrucks pushed Tesla shares down 0.5 percent. Faulty accelerator pedals can cause vehicles to accelerate abruptly.
Interest in government bonds
At the Foreign exchange market The reaction to the latest events in the Middle East has been cautious. The dollar only benefited temporarily from this; the dollar index is currently losing 0.1 percent. The yen and the Swiss franc – also classic refugee currencies in times of crisis – have now seen more popularity. In the case of the yen, investors were probably betting on Japan’s intervention in favor of the domestic currency, MUFG suspects. The yen is at a level where interventions can be expected.
Government bonds are also sought after as supposed safe havens. In return, rising prices cause returns to return. The yield on ten-year papers fell by 2.1 basis points to 4.61 percent. The price of gold also benefits from its status as a “safe haven”. The price per troy ounce increased by 0.6 percent to $2,394.
Oil prices are volatile. Brent and WTI prices are currently rising by up to 0.5 percent. XTB refers to reports from the Iranian state news agency IRNA that the damage was limited. In addition, the International Atomic Energy Agency has confirmed that Iran’s nuclear facilities are intact.