Waiting for Powell
Unclear interest rate depresses Friday mood on Wall Street
March 16, 2024, 12:45 a.m
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At the end of the week, the benchmarks in the USA are falling. There is too much uncertainty about what will happen to the interest rate turnaround. Among the big companies, Software Rise disappoints Adobe.
The guesswork surrounding possible interest rate cuts is wearing on the nerves of US stock investors and has put them on the defensive at the end of the week. The Dow Jones Index the standard values closed 0.5 percent lower at 38,714 points. The technology-heavy one Nasdaq fell one percent to 15,973 points. The broad one S&P 500 lost 0.6 percent to 5117 points.
Surprisingly stubborn inflation had recently raised doubts about the US Federal Reserve’s rapid interest rate turnaround. Following statements by central bank chief Jerome Powell regarding the interest rate decision on Wednesday, it should become clearer whether market participants’ expectations of a turnaround in interest rates from the middle of the year are justified.
The Fed has been pursuing a high interest rate policy in the fight against inflation for a long time and wants to slow down the high-speed job engine without strangling the economy. “The earliest possible rate cut could come in June, although we wouldn’t be shocked if the rate cut is delayed until later in the year if the data continues to be as strong as it has been recently,” said investment expert Carol Schleif, of BMO Family Office .
Adobe disappointed, Micron surprised
Some disappointing forecasts dampened the mood among companies. Shares of Adobe fell by almost 14 percent. The Photoshop provider expects lower sales in the quarter than hoped due to weak demand for its photo programs with AI functions. The profit forecast of Ulta Beauty was also worse than analysts expected. The papers lost more than five percent. Increased supply chain costs and increased promotions are depressing the cosmetics retail chain’s earnings.
Investors, however, were optimistic about the company’s balance sheet Micron next week. The US chip manufacturer’s shares gained around two percent. “Given current very high memory chip prices, we expect Micron to beat the average analyst forecast and raise its third-quarter guidance,” said Citigroup analyst Christopher Danely.
Bitcoin is giving way
The witches’ sabbath on Friday, when options and futures on stocks and indices become due on the futures markets, caused price fluctuations on the stock exchanges that were sometimes difficult to explain. Professional investors try in advance to push the prices in a direction that is favorable to them because they speculate on certain price levels with the futures contracts.
Investors in the cryptocurrency market were cautious Bitcoin ended his rally for the time being. The cryptocurrency with the highest sales lost around four percent to around $68,100. “On the one hand, further record levels are tempting, but on the other hand, reaching for the cash lever remains tempting,” said Timo Emden from the analysis house Emden Research.