Wall Street up
US stock exchanges leave interest rate disappointment behind them
February 1, 2024, 10:43 p.m
US investors’ hopes of an interest rate cut as early as March have been dashed. However, the disappointment seems to have already been overcome after the slump from the previous day. The important US indices close in positive territory
The US stock exchanges have made up for some of their losses from the previous day. Support came from falling market interest rates. The Dow Jones Index gained 1.0 percent to 38,520 points, S&P 500 and Nasdaq Composite rose by 1.2 and 1.3 percent respectively. 2207 (Wednesday: 616) price winners were seen, compared to 654 (2227) losers. 52 (73) titles closed unchanged. The disappointing business figures of large technology companies such as Alphabet and AMD seemed to have been dealt with for the time being.
“Most investors have been waiting for the slightest misstep to take advantage of the excessive technology rally,” said analyst Ipek Ozkardeskaya from Swissquote Bank, referring to the previous day’s crash in technology stocks. However, there is a threat that the technology heavyweights will have to report their business after the trading session Apple, Amazon and Meta new trouble. The business figures should really convince investors, otherwise the sell-off in the technology sector is likely to develop new dynamics, warned Ozkardeskaya.
The US Federal Reserve’s hopes of a first interest rate cut, possibly as early as March, which the US Federal Reserve had largely removed from the market, also appeared to have been overcome. This was all the more true because published data sometimes spoke the same language. While US productivity was better than expected in the fourth quarter, unit labor cost growth remained below consensus. Only the weekly number of initial applications for unemployment assistance, which rose slightly more than expected, did not quite fit into the picture. The ISM manufacturing purchasing managers’ index recovered more than expected in January, but remained in contractionary territory.
New York Community Bancorp remains in focus
After the 38 percent share price debacle New York Community Bancorp the day before, investors continued to keep an eye on the smaller regional banks sector. Concerns about the sector had also weighed on the overall market the day before. The bank had admitted problems with its exposure to the US commercial real estate market and had made high provisions. The price fell by a further 11 percent.
After bond yields collapsed in the wake of weaker ADP labor market data the day before, market interest rates continued to decline following the latest economic data. The weekly labor market data may have attracted buyers to the market here. The dollar followed yields lower; the dollar index fell by 0.2 percent.
Reports of progress in negotiations for a ceasefire between Israel and the Palestinian terrorist organization Hamas expressed concern Oil prices deep into negative territory. Initially, supply concerns due to the situation in the Red Sea drove prices up.
Qualcomm disappoints with outlook
For Qualcomm it fell by 5 percent. The chip manufacturer generated more sales and earned more than expected in the first quarter. However, the outlook for the current quarter was only in line with expectations.
Honeywell lost 2.4 percent. The conglomerate increased its earnings in the fourth quarter with slight growth compared to the previous year. However, sales fell short of market expectations. The pharmaceutical company Merck & Co performed better than expected in the fourth quarter and gave guidance for 2024 that is at the upper end of Wall Street’s expectations. The price rose by 4.6 percent.