Wall Street in an uptrend
US inflation data put investors in buying mood
11/15/2022, 10:45 p.m
Hopes of a turnaround in inflation are burgeoning on Wall Street. Standard values can benefit from the positive sentiment. Winner of the day is retail giant Walmart and online bank Nu.
Investors are grabbing US stocks in anticipation of more cautious rate hikes by the Fed. The US Standard Value Index Dow Jones and the broad one S&P 500 increased by 0.2 percent and 0.9 percent, respectively. The tech-heavy one Nasdaq gained 1.4 percent. Companies in this sector benefit from a less restrictive monetary policy because they have to finance their strong growth with debt.
The rally was triggered by the surprisingly small increase in US producer prices in October. “The data supports hopes that inflation is turning the corner,” said Robert Pavlik, portfolio manager at wealth manager Dakota Wealth. He therefore expects the Fed to only raise the key rate by half a percentage point in December after four XXL rate hikes of 0.75 percentage points each in a row. The pace in the coming year depends on further price developments.
Oil price increases slightly
On the foreign exchange market, the dollar traded somewhat lighter with the producer prices. Of the dollar index fell 0.2 percent. This reinforces the expectation that the Fed will increase interest rates at a slower pace, it said. US bond market yields eased on the prospect of slower rate hikes by the Fed
After the previous day’s losses, prices on the oil market were somewhat firmer again, supported by geopolitical uncertainties surrounding the Ukraine war. The price for the variety Brent increased by 0.6 percent, the STI-Price by 1.2 percent. Most recently, Opec had left its forecasts for global oil supply and demand largely unchanged, warning that major uncertainties such as the Covid-19 cases in China and Western efforts to thwart Russian oil exports weighed on the prospects for make the energy markets highly uncertain.
Online bank NU records largest daily increase
Among the winners in the US stock market was Walmart with a price increase of 7.3 percent. The world’s largest retailer raised its full-year targets and plans to buy back $20 billion of its own stock. The company also surprised positively across the board with its quarterly figures, praised analyst Michael Banker from the research house DA Davidson. This brightened sentiment across the industry. As a result, Home Depot also overcame its initial price weakness and gained two percent. Although the hardware store chain had presented quarterly figures that exceeded market expectations, it was cautious about the Christmas business.
The US titles of the Taiwanese chip provider TSMC With an increase of almost 14 percent at times, they were heading for the largest daily gain in 14 years. Stock market guru Warren Buffett and his investment company Berkshire Hathaway bought the world’s largest contract manufacturer for around four billion dollars. According to insiders, TSMC is negotiating with the city of Dresden about the construction of a semiconductor plant in the Saxon state capital.
Another Buffett holding also posted strong gains: the Brazilian online bank well. With an increase of up to 21 percent, your titles beckoned the largest daily increase since the IPO around a year ago. The institute reportedly increased sales by 171 percent to a record high of $1.3 billion.