US investors grab stocks
Inflation low makes interest rate worries go away
07/12/2023, 10:58 p.m
In June, US consumer prices increased by only 3.0 percent compared to the previous year. Financial analysts had expected significantly higher inflation. Tech values in particular are therefore increasing on Wall Street. Domino’s Pizza also benefits from a new partnership with Uber.
US investors reacted with relief to the surprisingly sharp drop in inflation and boldly bought shares. The Dow Jones closed 0.3 percent higher at 34,347 points. The tech-heavy one Nasdaq advanced 1.2 percent to 13,918 points. The broad one S&P 500 increased 0.7 percent to 4472 points.
Falling energy prices pushed US inflation to its lowest level in more than two years in June. In June, consumer prices rose by only 3.0 percent compared to the same month last year and thus slightly less than analysts had expected. Technology stocks in particular received further momentum as a result.
peak of interest rate hikes
“The policy implications are clear, the Fed is at or near the end of this rate hike cycle,” concluded market strategist Art Hogan, of wealth manager B Riley Wealth. The majority of investors are expecting yet another rate hike at the next Fed meeting on July 25th and 26th. “The data doesn’t confirm that they actually need to raise, but given their persistence, they probably will anyway,” said Brian Jacobsen, chief economist at Annex Wealth Management. Fortunately, the market is counting on this increase.
The US Federal Reserve’s “Beige Book” economic report hardly played a role in the market. Economic activity in the US has picked up slightly since late May, according to the Federal Reserve. Five out of 12 central bank districts reported some growth, five others reported no change, and two saw a slight decline, the Fed said. Expectations for the coming months are generally based on continued slow growth.
Domino’s Pizza benefits from Uber partnership
Because of the prospect of state aid, investors in the US put shares in Chinese companies in their portfolios. Alibaba increased by 2.4 percent, PDD gained 6.1 percent. China’s top market regulator said at a meeting with company officials that it would improve targeted support for individual companies, officials said.
shares of Microsoft stood after the latest news about the planned takeover of the video game maker Activision Blizzard 1.4 percent higher. After a US judge on Tuesday dismissed the FTC’s application for a temporary blocking of the largest deal in the video games industry to date, the British cartel supervisors want to reconsider their ban on the $ 69 billion takeover. Activision fell back about one percent after its previous day’s rally.
A cooperation with Above heaved the shares of Domino’s Pizza peaked by more than 17 percent to an eleven-month high of $409.48. In the future, US customers of the fast-food chain will be able to order via the Uber Eats and Postmates food delivery apps. Domino’s and franchisees take care of the delivery. “The partnership is likely to boost Domino’s flagging domestic delivery revenue and improve franchisee profitability,” said BTIG analyst Peter Saleh.