“Dealers looking for bargains”
Mood on Wall Street is improving again
April 22, 2024, 10:44 p.m
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Last week, the conflict between Israel and Iran caused little movement on the US stock exchanges. Now US investors are much more enthusiastic about buying again. The major indices are gaining momentum again. When it comes to individual values, Nvidia is improving quite a bit.
After the sell-off before the end of the week, US investors have returned to Wall Street. The Dow Jones index of standard stocks and the broader S&P 500 rose around half a percent to 38,152 and 4,993 points respectively. The index on the technology exchange Nasdaq rose by 0.6 percent to 15,366 points. “Traders are looking for bargains,” said Robert Pavlik, portfolio manager at Dakota Wealth. Price losses in the tech sector following a disappointing forecast from streaming pioneer Netflix and ongoing concerns about the timing of the US Federal Reserve’s first interest rate cut had recently weighed on the US stock markets.
“The market was oversold on Friday on Netflix results, it was primarily a technology-driven decline,” said Jay Hatfield, portfolio manager at InfraCap. Accordingly, the Nasdaq had lost around two percent before the end of the week. Ahead of the upcoming results from technology giants, investors would now realize that Netflix is not very meaningful for other tech companies. Tesla, Meta Platforms, Alphabet and Microsoft, among others, are presenting figures this week.
Easing tensions in the Middle East also contributed to the improved mood. “It seems like neither Israel nor Iran wants the Middle East crisis to escalate,” said Kazuo Kamitani, a strategist at Nomura Securities. “Since it doesn’t look like there will be another attack from either side, investors’ concerns have eased somewhat.” Given the increasing willingness to take risks, safer investments such as gold or government bonds were on the sales list. After the latest record run, the price of gold slipped by up to 2.6 percent to $2,329 per troy ounce, marking its biggest daily loss in more than a year. The prices of ten-year US bonds were also in the red. In return, the return advanced to up to 4.668 percent.
Investors in Europe had previously shown themselves to be more willing to take risks again. The DAX advanced 0.7 percent to 17,861 points. Nevertheless, investors remained cautious. “It’s a confusing picture for markets at the moment as there’s a lot of uncertainty surrounding events in the Middle East, the US tech sector is experiencing its biggest sell-off in around 18 months and yields are rising as interest rate cuts continue to be postponed,” said Deutsche Bank strategist Jim Reid.
Nvidia is picking up
Prices also initially fell on the crude oil market. During the course of trading, the US WTI variety returned to positive territory and rose in price by 0.2 percent to $83.27 per barrel. The Brent variety from the North Sea only made up for part of the losses and fell by 0.3 percent to $ 87.00. Unless there are actual disruptions in supply, geopolitical risk premiums are generally not permanent, said UBS strategist Giovanni Staunovo. In terms of individual values, Nvidia increased by up to 4.5 percent at the start of the week, making up for part of the ten percent drop from Friday.
“Anyone who believed that the imagination of artificial intelligence would ensure that share prices rose forever was proven wrong,” said Konstantin Oldenburger from broker CMC Markets, referring to Friday’s collapse. “The market has become increasingly one-sided in recent months and is now clearing up before the industry’s important quarterly figures.” Things went down after new price cuts with Tesla. The electric car manufacturer’s titles lost up to 5.6 percent. The company has cut prices for its Model 3 and Model S in Germany and China to combat weakening demand and growing competition. Price cuts of a similar magnitude were announced in the USA on Friday.
You can find everything else about today’s stock market events here.