Optimism ahead of Fed decision
Wall Street ends January up
01/31/2023 11:04 p.m
The New York Stock Exchange brings the strong January to a befitting end: After a weak start to the week, the standard value indices more than made up for the losses of the previous day thanks to a final spurt. Technology stocks in particular are clearly on the up again.
Hopes of smaller rate hikes by the US Federal Reserve are giving Wall Street a boost. the Dow Jones Index the standard values closed 1.1 percent higher on Tuesday at 34,086 points. The tech-heavy one Nasdaq advanced 1.7 percent to 11,584 points. The broad one S&P 500 increased 1.5 percent to 4076 points.
Above all, a surprisingly gentle increase in wages in the USA has brightened investor sentiment. Labor costs rose 1 percent in the fourth quarter, compared to 1.2 percent in the previous quarter and the median analyst forecast of 1.1 percent. “The Fed will be reviewing any index by tomorrow that could give it a better look at inflation, and this is one of them,” said economist Peter Cardillo of investment adviser Spartan Capital Securities.
Analysts believe it is a given that the Fed will cut interest rates on Wednesday in view of falling inflation. A rate hike of 25 basis points is expected. “The question will now be how the Fed will communicate afterwards,” said Jason Pride, chief investor at asset manager Glenmede. “They probably think they’re on the right track with interest rates, but the recent rise in stocks and the drop in longer-term interest rates isn’t necessarily what they want.”
Investors’ hopes supported the oil price. The light US variety STI rose 1.5 percent to $79.11 per barrel (159 liters). the Brent Crude Oil Futures March, on the other hand, fell 0.5 percent to $84.47 a barrel. The March contract expires on Tuesday. The more heavily traded April contract rose 1.3 percent to $85.57 a barrel.
Investors also grabbed it US Treasury Bonds. In contrast to the rising prices, yields fell. Ten-year US bonds returned about 3.529 percent after 3.551 on Monday. That helped stocks of tech stocks like Amazon, Microsoft and the graphics card manufacturer Nvidia to an increase of up to 2.6 percent. According to experts, rising inflation and higher interest rates will devalue future profits from these high-growth companies.
In terms of individual values, the group results and forecasts remained in the spotlight. A quarterly result above market expectations and an increase in the dividend encouraged investors to buy UPS. Parcel service shares rose nearly five percent to $185.23. The papers of the largest US carmaker General Motors also rose 8.3 percent to $39.32 after a record gain. Also the surprising increase in SpotifySubscribers drove the title of the music streaming service by 12.7 percent to $ 112.72.
The shares of the construction machinery manufacturer Caterpillar lost 3.5 percent to $ 252.29 after missed profit expectations. A warning of possible burdens from the increased inflation also pushed the share certificates of the fast food chain MC Donaldswhich fell 1.3 percent to $267.40.