US stock markets close erratically
Inflation figures make investors nervous
05/10/2022, 10:50 p.m
While the share price of the one-time hopeful Peloton continues to fall, the curve is slowly pointing upwards again. Before the release of the inflation figures on Wednesday, however, the US stock markets are showing mixed results. The Dow Jones closes lower while the Nasdaq and S&P 500 gain.
US stock markets failed to find a common direction on Tuesday. In the high-tech stocks, bargain hunters took hold in late trade. The US Standard Value Index Dow Jones closed 0.3 percent lower at 32,160 points. The tech-heavy one Nasdaq on the other hand, advanced by around one percent to 11,737 points. The broad one S&P 500 increased 0.2 percent to 4001 points.
It was clear that the price gains would not last, said stock trader Dennis Dick of brokerage house Bright Trading. After all, no one wants to be caught on the wrong foot if US inflation data came out higher than expected on Wednesday. “The nervousness in front of the numbers is high.” Experts are expecting one in April weakening of the rate of inflation year-on-year to 8.1 from 8.5 percent. Producer prices will follow on Thursday, with increases forecast to have slowed to 10.7 percent from 11.2 percent. From these numbers, stockbrokers hope to draw conclusions about the pace of the expected US interest rate hikes.
Cryptocurrencies initially held the bar the bargain hunters. Bitcoin rose 1.1 percent to $32,279 after the cyber currency fell below $30,000 for the first time in ten months in the wake of the general stock market sell-off. However, since cryptocurrencies are treated like technology stocks by institutional investors, another sell-off must be expected at any time in turbulent phases, said analyst Timo Emden from Emden Research.
Novavax picks up again after a price drop
Before re-entering the crude oil market many investors shied away from it. The price of the US variety WTI fell by 3.4 percent to $99.62 per barrel (159 liters). The corona lockdowns in China and rising interest rates due to inflation fueled fears of a slowdown in the global economy and lower demand, said analyst Tamas Varga from brokerage house PVM.
At the stock market Peloton shares fell as much as 20.4 percent to a record low of $11.25. At the end there was still a minus of 8.7 percent. The fitness equipment manufacturer had announced a slump in sales and a surprisingly high loss of $757.1 million. In addition, CEO Barry McCarthy warned that at $879 million, the capital base was thin for a company of this size. Peloton missed even the low market expectations, criticized investment strategist Michael Hewson from brokerage house CMC Markets. Even with the recent pricing, the company is finding it difficult to get rid of its fitness bikes and treadmills.
Novavax papers recovered after a sharp drop in prices and closed a good one percent in the plus. The pharmaceutical company has so far only delivered a fraction of the at least two billion doses of its coronavirus vaccine targeted for 2022. However, he expects an increased demand for booster vaccinations in the coming fall, wrote analyst Georgi Yordanov from asset manager Cowen. Tests indicated that the serum offered good protection against the omicron variant.