Nasdaq is hit hardest
Interest rate concerns are troubling US investors
February 13, 2024, 10:56 p.m
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Poor US inflation data is fueling new interest rate fears among investors on Wall Street. Interest rate-sensitive tech stocks in particular are heading downwards. As the dollar rises, gold prices fall to a two-month low.
An unexpectedly significant increase in US consumer prices in January ended the record hunt on Wall Street. Over the year, the price increase was above expectations, and inflation in the core rate was also higher than expected. This was poison for speculation that interest rates would soon fall. On the interest rate futures market, the priced-in probability of an initial cut in May fell further to around 36 percent. Before the price data it was still at 60 percent. For March it was now practically zero. “Right now, June is the most likely Fed meeting for the first rate cut,” noted Global X analyst Michelle Cluver.
The Dow Jones Index fell by 1.4 percent to 38,273 points. S&P 500 and Nasdaq Composite lost 1.4 and 1.8 percent respectively. The Nasdaq indices are considered particularly sensitive to interest rates due to the often high valuations of the many technology and growth stocks they contain.
At the Bond market Yields rose to textbook annual highs. The dollar increased interest rates parallel to interest rates, and the euro fell significantly accordingly. The dollar index rose 0.7 percent to its highest level in over a month. The Gold price fell to a two-month low – weighed down by higher market interest rates and the firm dollar.
Goodyear slips, Tripadvisor moves up
The individual values showed Coke 0.6 percent lighter. The beverage manufacturer received a boost in sales in the fourth quarter through price and volume increases and achieved market expectations with its profit. The net profit nevertheless fell. The company also promised falling prices in the future.
Biogenic On the other hand, reported a decline in sales and forecast a further decline in revenue for the current year as a result of declining revenues from the biotechnology company with its multiple sclerosis products and contract manufacturing services. Biogen prices fell by 7.4 percent.
The Hasbro stock lost 1.3 percent after the toy manufacturer not only presented disappointing financial figures for the fourth quarter, but also gave a pessimistic outlook. The competitor’s course Mattel fell by 1.7 percent. Goodyear fell by 15 percent after weak business figures and a similar outlook.
Jetblue rose 21.6 percent after activist investor Carl Icahn said he owned nearly 10 percent of the company and might push for a board seat. Tripadvisor increased by 13.8 percent. The online travel agency had formed a special committee to explore strategic options. Parent company Liberty Tripadvisor Holdings had previously announced that board discussions were underway about a possible cash takeover of Tripadvisor and Liberty Tripadvisor.
Oil prices rose. The oil cartel OPEC left its forecast for oil demand growth this year unchanged from January. The amount mentioned suggested a slightly more positive assessment of US oil demand given the recent positive economic signals.