Xi and Biden without impulse
Wall Street is losing momentum
November 16, 2023, 10:52 p.m
Listen to article
This audio version was artificially generated. More info | Send feedback
Wall Street has been going uphill for weeks, but now the upward trend appears to be coming to an end. The US inflation data is giving investors hope. In contrast, the eagerly awaited meeting between Biden and Xi has no major effect.
After the recent strong increases, Wall Street has shown little change. The Dow Jones Index closed 0.1 percent lower at 34,945 points. For the S&P 500 and the Nasdaq Composite it went up by 0.1 percent each. There were a total of 1,086 (Wednesday: 1,586) price winners and 1,761 (1,276) losers. 89 (87) titles closed unchanged. After the rapid increase in recent weeks, the air is now gradually becoming thin, traders said.
Still, the inflation data “strengthened investors’ belief that the Federal Reserve may refrain from raising interest rates further,” raising expectations that the Fed could cut interest rates in May next year, CPT Markets said. In the US economic data published before the market, the focus was primarily on initial weekly claims. These rose more than expected. The data points to easing in the labor market and also supports hopes that the Federal Reserve will end interest rate hikes, participants said.
The situation for US industry in the Philadelphia region brightened somewhat more in November than economists had expected. Industrial production fell slightly more than forecast in October compared to the previous month. U.S. import prices fell in October for the first time since June, falling more than expected, suggesting inflation pressures may be easing more significantly.
US-China summit without impulse
In terms of individual values, the share price went from Cisco Systems down 9.9 percent after the network equipment provider lowered its sales forecast for the current year. In terms of sales and profits in the first quarter, the company narrowly exceeded analysts’ estimates.
However, the eagerly awaited meeting between US President Joe Biden and China’s head of state Xi Jinping did not provide any impetus. Essentially, both sides simply agreed to resume military communications.
The U.S. dollar tended to change little. After higher-than-expected initial claims increases, investors have another reason to bet that the interest rate hikes that have supported the dollar are over, sources said. For the Oil prices it went down significantly. The trigger for the current downward movement was the increase in US crude oil inventories the day before. There was also concern about weak demand in China.
Walmart and Alibaba lose
Bond market yields gave up some of their previous day’s gains. There was a countermovement here after the crash on Tuesday in the wake of lower than expected US inflation data. Now the labor market data and import prices supported the prices. The ten-year yield fell 8.1 basis points to 4.45 percent.
For the Walmart stock it fell 8.1 percent. The US retail group sold and earned more than expected in the third quarter, but disappointed with its increased annual forecast. The papers from Alibaba fell by 9.1 percent. The Chinese e-commerce giant increased sales in the second quarter and was back in the black. But the rejection of the planned spin-off of the cloud division was particularly damaging. Alibaba said it would oppose the spinoff because of recent moves by the Biden administration to expand export controls on advanced chips and semiconductor equipment.
Palo Alto Networks decreased by 5.4 percent. The cybersecurity company reported first-quarter profit and revenue that exceeded market forecasts. However, the estimates for the current quarter and the 2024 financial year fell short of expectations.