Vigilance remains high
Calm down on Wall Street continues
03/29/2023, 10:25 p.m
Confidence is growing on US stock markets that the worst of the banking turmoil is over. Investors are also pleased to note the signals from the chip manufacturers. But analysts remain cautious – the recent swings in sentiment have all been sudden.
Wall Street ended the trading day with premiums. Market participants pointed to the decline in the VIX volatility index, which fell below the long-term average of 20. This is taken as a sign of relaxation. At the peak of the banking crisis, the value was still over 30. The volatility index is considered a “fear barometer”. The Dow Jones Index closed 1.0 percent higher at 32,718 points. For the S&P 500 was up 1.4 percent. The Nasdaq Composite was 1.8 percent higher.
“This normalization is often a sign that investors are assuming the worst of the crisis is over,” said Tom Lee, Fundstrat’s head of research. Every day that passes strengthens the conviction that a line has been drawn under systemic banking concerns, ING said. “We have to be as cautious as possible because the shifts in market sentiment over the past few weeks have been sudden and sharp,” the analysts noted.
Slight drop in oil prices
The dollar rose after the last seen returns, especially against the yen. The dollar index was up 0.2 percent. The Bank of Japan is unlikely to relinquish its dovish control of the yield curve, sources said. On the other hand, the greenback was unable to make up any ground against the euro. Despite the recent reassurance, the market appears to be somewhat more skeptical about the US than about the euro zone. The Fed has become somewhat more cautious, while the ECB is going through its interest rate cycle almost unaffected by events and continues to sound restrictive. In this respect, euro levels of over 1.08 dollars seemed justified. The euro is currently little changed from the previous day at 1.0840 dollars.
For the oil prices it went down slightly after gains in the meantime. After two days with significant surcharges, profits were taken, it said. On the one hand, there were supply concerns and signs of rising demand in the US. The closure of a key Iraqi oil pipeline also supported prices, said Warren Patterson, head of commodity strategy at ING. On the other hand, the drop in Russian production was less than expected. Official US oil inventory data has again shown a surprisingly sharp decline, suggesting rising demand.
Chip values rise – bottom reached?
In terms of individual values, the shares rose by Micron Technology by 7.2 percent. The chip maker saw sales slump by more than half in the second quarter. A weak market for PCs and smartphones weighed on the results, which was also expected on the market. But CEO Sanjay Mehrotra hinted that the market has bottomed out. Micron also announced that it would be reducing the number of employees more than previously announced as part of a cost-cutting program. intel increased by 7.6 percent.
Lululemon Athletica increased by 12.7 percent. The sportswear retailer reported better-than-expected fourth-quarter results, although net income of $120 million was down significantly from a year earlier ($434.5 million). In addition, Lululemon came up with a sales outlook for the full fiscal year that was above estimates.