Profits on the US stock markets
Fed bankers are making investors sit up and take notice
November 28, 2023, 11:09 p.m
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High-ranking officials at the US Federal Reserve are thinking out loud about upcoming monetary policy easing steps. That’s what you like to hear on Wall Street, the US indices are closing in positive territory. The price of gold is also rising, for the fourth day in a row.
The public discussion of an interest rate cut by representatives of the US Federal Reserve (Fed) has brightened the mood on Wall Street. The Dow Jones Index the standard values closed 0.2 percent higher on Tuesday at 35,416 points. The technology-heavy one Nasdaq advanced 0.3 percent to 14,281 points. The broad one S&P 500 gained 0.1 percent to 4554 points.
There are good economic arguments for easing monetary policy if inflation continues to decline for another few months, Fed Director Christopher Waller said. But he didn’t want to commit to a specific time period, they said. In addition, Chicago Fed Chief Austan Goolsbee said of inflation: “It’s declining, it’s not below target yet, but in 2023 we’re on track to have the sharpest decline in the inflation rate in 71 years to reach.”
The US indices then turned positive after a lethargic start. In addition, the return on investment fell two-year government bond, which is particularly sensitive to possible changes in monetary policy, to 4.763 percent. The much-noticed yield difference – in technical jargon, spread – to the German two-year federal bond also narrowed. The foreign exchange market fell Dollar index by 0.4 percent to 102.76 points, the lowest level since mid-August. Speculation about an end to the Fed’s interest rate hikes had already pushed the world’s reserve currency down by around three percent in November. Overall, market expectations for a rate cut of at least 25 basis points in May 2024 rose to almost 63 percent from the previous 50 percent, according to data from the CME stock exchange.
With a view to the meeting of the OPEC+ countries planned for Thursday, which includes members of the oil export cartel and other producing countries such as Russia, the price of oil rose. The North Sea crude oil variety Brent and the light US variety WTI prices rose by around two percent to $81.57 and $76.39 per barrel (159 liters). An extension or deepening of the funding cuts is expected. In addition, the weaker US currency also supports the price of oil, as crude oil traded in dollars becomes cheaper for investors in other currency areas.
Also gold, which is also traded in dollars on the world market, was able to benefit from this. The price of gold climbed for the fourth trading day in a row and reached its highest level in more than six months with an increase of 1.4 percent. Investors bought into gold mining operators in the hope of good business. The industry giants Newmont and Barrick Gold gained a good six or around five percent.
In terms of individual values, the chip manufacturer’s securities fell Micron by almost two percent. The reason for this was a change in the forecast. The financial service provider Affirm However, it was able to further expand its gains from the previous day with an increase of over eleven percent. Increased online business on “Cyber Monday” and the “order now, pay later” offer boosted Affirm during the bargain day.