Wall Street closes in positive territory
US stock exchanges are becoming friends with the interest rate vote
May 2, 2024, 10:43 p.m
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Investors on Wall Street are relieved after the US Federal Reserve’s interest rate decision. From a distance, Fed Chairman Powell’s comments on future interest rate policy seem dovish. It’s a good day for Boeing.
With a little delay, Wall Street reacted positively to the latest statements and interest rate prospects from the US Federal Reserve (Fed). The day before, an initial attempt at recovery collapsed after the Fed described it as unlikely that the next interest rate hike would be higher. However, Fed Chairman Powell added that it was not certain that there would be interest rate cuts in 2024. By the evening the interpretation had prevailed that the statements were generally rather dovish.
The Dow Jones Index gained 0.9 percent to 38,226 points, S&P 500 and Nasdaq indices increased by 0.9 or up to 1.5 percent. According to preliminary information, there were 2122 (Wednesday 1930) price winners and 673 (890) losers on the Nyse. 63 (47) shares closed unchanged. Yields on the bond market fell significantly again. The fact that US unit labor costs rose much more than expected in the first quarter did not faze the players just one day after the Fed’s announcements.
Although the Fed acknowledged in its statement the lack of further progress on inflation this year, central bank Chairman Powell delivered a dovish message in the press conference, analysts at Goldman Sachs said. “We have left our forecast unchanged and continue to expect two interest rate cuts this year in July and November”. Market strategist Quincy Krosby of LPL Financial emphasized that there was no indication of a possible rate hike, only speculation that rates might stay high for longer than an impatient market would like.
The dollar was unable to recover after its setback the day before as US market interest rates continued to fall. It trended sideways against the euro, but fell significantly against the yen, with the dollar index losing 0.4 percent. Market participants suspected repeated interventions by Japan behind the renewed strong appreciation of the yen. From peak to trough of the initial yen move, the magnitude was about 5 yen, consistent with previous suspected and confirmed interventions, Maybank analysts said. After almost 158 yen the evening before, the dollar recently cost only 153.30 yen.
Almost nothing happened with oil prices, the gold price (-0.7%) came under some pressure due to the unexpectedly high unit labor costs. These are likely to fuel inflation and thus speculation that interest rates will remain high for longer, it was said in the trade.
Boeing and Moderna take off
Prices rose on the stock market Qualcomm by 9.8 percent. The semiconductor company presented good business figures for its second quarter. The semiconductor sector also fell Qorvo after a weak forecast by 14.5 percent. The biggest winner in the Dow was a plus of 4.3 percent Boeing. The fact that the aerospace group had gained financial breathing room with a bond placement of over $10 billion on Wednesday continued to generate purchases here. For Apple it rose by 2.3 percent in the immediate run-up to the eagerly awaited quarterly figures after the end of trading.
Ebay fell by 3.3 percent after solid figures because the forecast for the full year remained below expectations. The biotechnology company Moderna performed better than expected despite a slump in sales, and Moderna also announced a new vaccine for the fall. The price shot up by 12.7 percent. Linden fell by 5.2 percent. The industrial gases group benefited from rising prices and higher productivity in the quarter under review and also expects further profit growth. However, Linde is also planning investments of 4.0 to 4.5 billion dollars.