Record price in New York Wall Street plays the interest rate card – Rally continues
19.08.2024, 23:51 Listen to article
This audio version was artificially generated. More info | Send feedback
Fears of recession are fading and the first interest rate cut is getting closer. US stock markets are continuing to rise. The meeting of central bankers in Jackson Hole is eagerly awaited. Then there should be new indications of how the Fed weighs the risks between tightening and loosening.
The rally on the US stock markets continues in the new week. The three most important indices closed in positive territory. Dow-Jones-Index climbed by 0.6 percent to 40,897 points. The broader S&P 500 rose by one percent to 5608 positions, the technology-heavy Nasdaq-Index gained 1.4 percent to 17,877 points. The three stock market barometers celebrated their best week of the year after surprisingly strong economic data eased fears of a recession in the largest economy.
According to experts, the expectation of the international central bank conference in Jackson Hole in the US state of Wyoming created a positive mood in the new week. The spotlight is on a speech by Federal Reserve Chairman Jerome Powell on Friday. Investors are hoping that this will provide clues about the next steps of the US Federal Reserve. “The Fed recently mentioned that the risk of monetary policy being too tight and that of monetary policy being too loose are roughly equal,” said Phil Blancato, CEO of asset manager Ladenburg Thalmann. “In this sense, any statement in one direction or the other could cause the markets to view one risk as more pronounced than the other.”
“We expect the Fed to reluctantly support a 25 basis point rate cut at its September 18 meeting. The chances of a 50 basis point rate cut seem slim unless the September 6 employment numbers show significant weakness,” said bond strategist Andrew Brenner of NatAlliance Securities. The weaker-than-expected index of leading indicators did not stand in the way of rate cuts.
In anticipation of falling interest rates, the Dollar-Index 0.6 percent to 101.88 points. The euro, in contrast, advanced by 0.5 percent to 1.1082 dollars. The Gold price came back somewhat after another all-time high with profit-taking. The crude oil market, meanwhile, continued to decline. The North Sea variety Brent and the US variety WTI fell by roughly 2.5 percent to 77.81 and 74.49 dollars per barrel (159 liters). Last week they had already slipped by a total of around three and five percent. The reason for this is ongoing concerns about demand from China and the approaching end of the holiday season in the USA, said Hiroyuki Kikukawa of broker Nissan Securities.
In terms of individual values, Advanced Micro Devices with another acquisition. The shares of the US chip manufacturer rose 4.5 percent after the company announced that it wanted to take over the server manufacturer ZT Systems for 4.9 billion dollars. With this, AMD wants to reduce the gap to the world market leader Nvidia in highly profitable AI graphics processors (GPUs). To date, Nvidia has dominated around 80 percent of the world market for AI specialty processors. After the downgrade to “Equalweight” by Morgan Stanley, the price fell from HP by 3.6 percent.
Also in demand were McDonald’sThe fast-food giant’s shares rose by around 3.3 percent. Experts at the investment bank Evercore ISI have raised the price target. One of the reasons for this is the company’s recent market share gains. General Motors (GM) is apparently thinning out its software and services division. The US carmaker is cutting over 1,000 jobs in the area, said a person familiar with the matter. The share price rose by one percent. FuboTV rose 17.6 percent after a federal judge temporarily blocked the launch of a competing sports streaming service.
In contrast, the shares of the ailing investment bank B. Riley by a further 5.8 percent after the stock had already fallen by around 65 percent in the past week. Co-founder and co-CEO Bryant Riley had offered to buy the bank on Friday after the company warned of a quarterly loss due to impending write-downs.
Business figures came from Estee LauderThe share price fell by 2.2 percent after the cosmetics group gave disappointing annual forecasts and justified this with the weak China business.
