Wall Street on course for recovery
Stable US economy inspires investors
01/26/2023, 11:14 p.m
Upbeat economic numbers give Wall Street a boost. Investors are now hoping that the Fed will step on the brakes in fighting inflation. While a planned job cut puts pressure on IBM’s papers, Tesla is on the up.
Investors on Wall Street are cautiously optimistic after robust US economic data and strong numbers from Tesla. the Dow Jonesindex of standard values closed 0.6 percent higher at 33,949 points. The tech-heavy one Nasdaq advanced 1.8 percent to 11,512 points. The broad one S&P 500 increased 1.1 percent to 4060 points.
“Investors are torn between upbeat forecasts from Tesla, bleak prospects for IBM and Mastercard, and a strong U.S. economy that shows no signs of weakness at all,” said Konstantin Oldenburger, an analyst at brokerage CMC Markets. The growth of the US economy by 2.9 percent in the fourth quarter is at least reassuring for those who are worried about an approaching recession, said Oldenburger.
But such strong economic growth could also prompt the US Federal Reserve to aggressively put the brakes on interest rates in an effort to fight inflation. A possible break after another increase in the coming week could be a long way off. A positive sign, however, is the fact that the major indices on Wall Street still have three trading days in January to reach their December highs and thus also take another step on the path to a sustainable recovery as a laggard.
Meanwhile, speculation about China’s growing thirst for raw materials pushed up oil prices. “The reopening of the economy in China supports the demand outlook,” said UBS analyst Giovanni Staunovo. Inventory data released by the US Department of Energy also eased investor concerns. Even though US inventories were at the highest level since June 2021, the weekly increase was not as strong as expected. The North Sea variety Brent and the light US variety STI increased in price by a good one percent to 87.17 and 81.11 dollars per barrel (159 liters).
Tesla was in the limelight for individual stocks with a price increase of almost eleven percent. The net profit of the world’s largest electric car maker jumped in the fourth quarter by almost 60 percent to $ 3.7 billion. Disappointing results and planned job cuts counteracted this IBM to. The titles of the IT group fell by 4.4 percent. A gloomy forecast also affected the Mastercard share. The credit card provider’s shares fell 1.3 percent. The group anticipates growth in the upper end of the single-digit range. According to data from Refinitiv, analysts expected stronger growth of 10.7 percent.
Unlike rival Visa, it benefited Mastercard from the opening of borders and the growing desire to travel in the Asia-Pacific region and was thus able to compensate for higher costs. Among the biggest losers were Bed Bath & Beyond with a price slump of around 22 percent. The ailing US furniture store has defaulted on a loan repayment. The company received a payment request from its bank, JPMorgan Chase. Bed Bath & Beyond examine all strategic alternatives up to bankruptcy.