New hope for interest rate cuts
US indices bounce back after setback
December 22, 2023, 12:03 a.m
Listen to article
This audio version was artificially generated. More info | Send feedback
After the profit-taking of the previous day, investors on Wall Street are coming out of cover again. Weak economic data is fueling hopes that interest rates will be cut soon. When it comes to individual values, the chip manufacturer Micron is particularly in demand.
US investors’ interest rate hopes following new economic data pushed Wall Street into positive territory on Thursday. The Dow Jones Index the standard values closed 0.9 percent higher at 37,404 points. The technology-heavy one Nasdaq advanced 1.3 percent to 14,963 points. The broad one S&P 500 increased one percent to 4746 points.
The US gross domestic product (GDP) did not grow quite as strongly as expected in the summer. This increased investors’ hopes that the US Federal Reserve could soon initiate the first interest rate cuts. The monetary authorities are trying to dampen inflation with higher interest rates without having too much of an impact on the economy. “The economic data points to a slowdown,” said Peter Cardillo, chief economist at financial services provider Spartan Capital Securities. However, he was cautious. “Markets are going up because yields are going down, and yields are going down because the market is expecting really weak economic activity next year and that the Fed is going to cut interest rates.”
Dollar under pressure
The return on investment ten-year US bonds In return for the rising price, it fell to as much as 3.829 percent after 3.877 percent on Wednesday. The hope of falling interest rates also depressed the greenback. The Dollar index fell 0.6 percent to 101.79 points. In return, the European common currency, the euro, gained 0.6 percent to 1.1003 dollars.
Oil prices initially fell again after Angola left OPEC. The North Sea variety Brent and the light US variety WTI Prices fell by 0.3 percent to $79.45 and $73.98 per barrel (159 liters). Membership in the Organization of Petroleum Exporting Countries is not in the national interest of the African country, said Oil Minister Diamantino Azevedo in a televised address. In addition, Angola did not play a relevant role within the energy cartel. If you remained a member, you could sooner or later be forced to cut production. This would contradict the country’s goals.
Among other things, the individual values were asked for: Micron. The chip manufacturer’s shares climbed by almost nine percent. The strong demand for memory chips for artificial intelligence (AI) makes the group optimistic about the future. The company therefore expects sales of around $5.3 billion in the second quarter. The analysts had assumed an average of 5.03 billion.
The prospect of a multi-billion dollar merger in the US media and entertainment industry, however, was not well received by investors. The shares of Warner Bros Discovery and Paramount Global lost between 1.5 and 2.8 percent. According to insiders, talks between the industry giants about a merger are still in the early stages.
The investors, however, covered themselves with papers from the electric car manufacturer Tesla a. The US government is considering higher tariffs on some goods from China, including electric vehicles, according to a media report. This was reported by the Wall Street Journal, citing people familiar with the matter. Accordingly, a review of the tariffs should be completed early next year. Tesla notes advanced by almost three percent.