Tension ahead of Fed decision
Labor market data makes US investors skeptical
January 30, 2024, 11:05 p.m
With small steps, the Dow Jones Industrial and the market-wide S&P 500 are once again approaching record levels. But there can be no question of real buoyancy. With the Fed’s next interest rate decision approaching, analysts believe traders should brace for disappointment.
In view of the inconsistent corporate balance sheets and economic data, the US stock exchanges did not find a clear direction on Tuesday. The Dow Jones Index the standard values closed 0.3 percent higher at 38,467 points. The broader one S&P 500 However, it fell 0.1 percent to 4,924 points after temporarily reaching a new all-time high. The technology stock market index Nasdaq lost 0.8 percent to 15,509 jobs.
The latest US labor market data, among other things, weighed on the mood. The number of job vacancies in the USA – a measure of the demand for personnel – recently increased unexpectedly. This key figure, which is also important for the central bank, increased to 9.026 million at the end of December. Experts had expected 8.75 million. This fueled concerns about the future monetary policy of the US Federal Reserve, which is trying to combat inflation with higher interest rates and cool down the hot labor market. The central bankers’ next interest rate decision is due on Wednesday evening. Analysts were cautious. “The Fed is unlikely to cut interest rates nearly as much as markets believe,” said Paul Nolte, an advisor and strategist at asset manager Murphy & Sylvest. “My biggest fear is that it will actually lower interest rates and then inflation will rise again.”
Oil prices continue to rise
The individual values stated UPS in focus. After poor quarterly results, the world’s largest parcel service wants to cut 12,000 jobs and put its truck freight subsidiary Coyote to the test. UPS shares slipped 8.2 percent, rivaling that of its rival FedEx fell 1.7 percent in their wake. Also the airline JetBlue came under heavy pressure after a weak outlook and lost 4.7 percent.
What was asked were against it General Motors, which grew 7.8 percent according to a strong forecast. The securities of competitor Ford gained 1.9 percent. Investors were also eagerly awaiting figures from Google parent Alphabet and Microsoft after the US stock market closed. “And the Big Techs have to deliver,” said Christian Henke, analyst at broker IG. “In view of the now astronomical valuation, there should be no unpleasant surprises.” These are likely to abruptly end the recent record hunt on Wall Street.
Meanwhile, the oil market went up again. The prices for the North Sea variety Brent rose 0.4 percent to $82.73 per barrel (159 liters). The light US variety WTI Prices rose by 1.2 percent to $77.73 per barrel. This was the highest they have been since November. The reason was concerns about the situation in the Middle East.
However, concerns about demand following bad news from China limited market gains. The end of the Chinese real estate developer in particular caused a stir Evergrande. Investors were worried about the consequences of the liquidation of the real estate giant, which was ordered at the start of the week, on the country’s weakening real estate market.