Oil prices continue to fall
Interest rate concerns are weighing on trading on Wall Street
April 17, 2024, 11:22 p.m
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Statements by Fed Chairman Powell about the hoped-for turnaround in interest rates are still spoiling the mood for US investors. The tech sector suffers the most, with the Nasdaq ending the trading day with significant losses. However, things are looking up in the aviation industry after strong figures from United Airlines.
After a short-term increase at the start of trading, Wall Street fell slightly again. The Dow Jones Index The standard value was 0.1 percent lower at 37,753 points over the course of the day. The broader one S&P 500 fell 0.6 percent to 5022 points. The technology stock market index Nasdaq lost 1.2 percent to 15,683 jobs. Investors again focused on concerns about the timing of the Fed’s first rate cut, analysts said.
However, Jay Hatfield, CEO and portfolio manager at asset manager InfraCap in New York, was calm: “Investors tend to fall into impulse mode. At first they were far too optimistic about the pace of interest rate cuts. Now they are overly pessimistic. ” He added that he believes a Fed rate cut in June is realistic. Until then, the current market trend is likely to continue with a tug of war between interest rate concerns and hopes.
The willingness to take risks remained low on Wednesday, among other things because of the recent statements by US Federal Reserve Chairman Jerome Powell, said stockbrokers. In view of the stubborn inflation in the USA, the central bank is signaling that it will remain tight and is putting off the interest rate turnaround. A change in monetary policy is not expected on the financial markets until September. Just a few weeks ago there was speculation about June as the likely time for the first reduction.
The reason for the return of investor fears is also the worsening Middle East conflict, said analyst Christian Henke from broker IG. “Israel could launch a counterattack against Iran at any time and make the escalation spiral turn faster.” However, the oil market continued to decline. According to experts, the expectation that interest rates that remain high for a longer period of time will affect the economy and thus demand for oil outweighed supply fears in connection with the Middle East conflict. The North Sea variety Brent and the US variety WTI Prices fell by around three percent to $87.46 and $82.82 per barrel (159 liters).
United Airlines numbers support aviation industry
Airline stocks, among others, were in demand after a strong report from United Airlines. The shares shot up by more than 17 percent. Those of competitors American Airlines, Southwest Airliness, delta and Alaska Air increased between just under two and a good six percent.
A possible end to a controversial exception to import tariffs on solar modules in the USA made investors sit up and take notice. After the publication of a corresponding Reuters report, shares of US solar companies rose First Solar or SolarEdge Technologies meanwhile by up to almost nine percent.
However, things went downhill for US Bancorp. The lender’s shares slipped 3.6 percent after a profit slump in the first quarter and a pessimistic forecast for the full year.
Also the US pharmaceutical company Abbott could not convince investors with its new annual outlook. The titles fell by a good three percent. The company forecast 2024 earnings of $4.55 to $4.70 per share. Previously it was expected to be between $4.50 and $4.70. “The cap remains unchanged, and that’s exactly the problem. Because the stock goes up when the cap is exceeded,” said Shagun Singh, analyst at investment bank RBC Capital Markets.
A success for the competitor Eli Lilly meanwhile, bet on the medical technology company’s shares ResMed to. The shares of the company, which produces medical devices to treat breathing problems during sleep, slipped by almost six percent. Profit-taking after a short-term increase of a good three percent pushed Eli Lilly slightly into the red. According to Eli Lilly, the pharmaceutical giant’s drug, which is sold under the names Mounjaro for diabetes and Zepbound for obesity, also proved effective against sleep apnea.