Tesla on the decline
Interest rate concerns after US data weigh on Wall Street
January 17, 2024, 10:46 p.m
The US economic data increases concerns about the Fed’s monetary policy. This is not good for the mood on Wall Street – the Dow Jones is falling. Tesla shares are also losing ground due to price reductions. Boeing, on the other hand, sees light at the end of the tunnel.
Interest rate fears following the latest US economic data are weighing on investor sentiment on Wall Street. The Dow Jones Index the standard values closed 0.3 percent lower at 37,266 points. The technology-heavy one Nasdaq fell 0.6 percent to 14,855 points. The broad one S&P 500 lost 0.6 percent to 4739 points.
US industry only recorded a slight increase in production in December. However, retailers in the USA were able to increase their sales more strongly than expected before the turn of the year. This fueled concerns about the timing of the expected monetary easing the US Federal Reserve Bank. The monetary authorities are trying to curb inflation by raising interest rates without strangling the economy. “The data gives investors cause for concern that the Fed is unlikely to cut interest rates in March after all,” said Sam Stovall, chief strategist at CFRA Research in New York. “The market is in something of a digestion phase at the moment, reassessing the likely timing and size of rate cuts this year.”
On the futures markets, the probability of the US Federal Reserve’s first interest rate cut in March is currently estimated at just under 60 percent. Before Fed Director Christopher Waller’s speech on Tuesday, which raised initial doubts about a rapid interest rate hike, it was more than 70 percent. However, falling interest rates are still factored into the decisions.
That too Weakness of the Chinese economy contributed to the poor mood among investors. The People’s Republic narrowly missed analysts’ expectations in the fourth quarter with an increase in gross domestic product (GDP) of 5.2 percent from October to December. As a result, investors fear weak demand from the world’s second largest crude oil consumer. The publication of the US economic report Beige book hardly played a role in the market. According to the Federal Reserve (Fed), the economy in the USA had barely budged recently.
Tesla on the decline
In terms of individual stocks, the weakening of the Chinese economy affected US-listed shares of Chinese companies. The papers from PDD, JD.Com and Bilibili lost between 0.7 percent and almost five percent. Price reductions for its Model Y were now also sent to Germany Tesla on the decline. The shares of the electric car manufacturer lost almost two percent. After Tesla had already reduced the prices for some models in China, the group also announced price reductions of around four to nine percent for Model Y vehicles in Germany.
The failure of a takeover of Spirit Airliness through JetBlue Airways Meanwhile, shares of both airlines increased. The shares of the US low-cost airline Spirit Airlines collapsed by more than 22 percent. This meant they extended their losses of 47 percent the day before. JetBlue also fell 8.7 percent. The shares had previously risen by five percent. A US court ruled on Tuesday that the planned merger worth $3.8 billion would harm ticket buyers.
The BoeingShares, on the other hand, embarked on a cautious recovery course. The aircraft manufacturer’s shares gained 1.3 percent. The inspections of a first group of controversial 737 Max 9 aircraft have been completed, the US aviation authority announced. An incident with a cabin part breaking off on a Boeing 737 Max 9 has pushed stocks down by a good 20 percent since the beginning of January.