new York Surprisingly strong corporate balance sheets sent Wall Street higher on Thursday. The Dow Jones index of standard values gained 1.1 percent to 33,646 points. The broader S&P 500 climbed 1.4 percent to 4,114 points. The Nasdaq technology exchange index jumped 2.1 percent to 12,100 jobs.
According to analysts, business results from giants such as Facebook parent Meta have outweighed fears about the economy and concerns about banks, according to figures from the US regional bank First Republic. “If you look at Microsoft and Meta, the rumors about the Nasdaq going down were grossly exaggerated,” said David Russell of online broker TradeStation. “A lot of people wanted to bury the technology and said it was dead forever. But now there is a good chance for growth stocks to make a comeback.”
At the same time, the latest US economic data gave conflicting indications of what the US Federal Reserve might do next. On the one hand, the local gross domestic product was surprisingly weak with an annual increase of 1.1 percent in the first quarter. On the other hand, the number of weekly jobless claims, which came in well below forecasts, indicated continued strength in the job market.
The Fed tries to raise interest rates just enough to dampen inflation without slowing down the economy too much. Therefore, weak economic data can fuel hopes for smaller rate hikes. “Economic reports continue to show a mix of slowing and accelerating trends,” said portfolio manager Thomas Martin of US wealth manager Globalt. “It’s hard to tell how much good news is good news and vice versa when it comes to what the Fed should do.”
Meta Spotlight
Meta’s stock jumped 14.6 percent to $239.94, its highest since February 2022. The Facebook parent promised surprisingly high sales for the current quarter after business at the beginning of the year was better than expected thanks to advertising revenue.
Bonds under pressure – oil prices stabilise
Meanwhile, the dispute over the debt ceiling in the USA and worries about persistent inflation despite the economic slowdown weighed on government bonds. In return for the falling prices, yields rose. Ten-year US bonds returned 3.511 percent after 3.430 percent on Wednesday.
Prices on the crude oil market are stabilizing after the recent price slide. The North Sea crude oil variety Brent and the light US variety WTI increased in price by 0.8 percent to 78.29 and 74.85 dollars per barrel (159 liters) respectively. “Oil is trying to find a bottom and the only thing that might offer some support is tech-driven buying,” said Edward Moya, an analyst at Oanda. On Wednesday, prices fell by around four percent. A surge in Russian oil exports had fueled fears of an offsetting effect from supportive OPEC production cuts. In addition, recession concerns had clouded the mood.
Look at other individual values
Caterpillar: The US construction machinery manufacturer increased its profit thanks to high demand and price increases. This was not least due to the US construction industry, which was encouraged to spend more due to the government’s infrastructure laws. Caterpillar’s construction equipment business saw sales up 33 percent in North America. On Wall Street, however, the stock was down around five percent.
Wall Street expert Koch: “The reaction to good results leaves something to be desired”
First Republic Bank: Shares in the ailing San Francisco bank managed to halt the downtrend and even turned positive. The stock shed about 60 percent of its value this week after the company said Monday it lost about $100 billion in deposits in the first quarter. The stock was up around 12 percent.
Eli Lilly: According to figures, the shares in the pharmaceutical company gained around two percent. The company has raised its sales and earnings guidance on strong demand for its diabetes drug Mounjaro. The prospect of Mounjaro being approved as a treatment for obesity in the US also appeared to have gone down well with investors. Eli Lilly wants to submit the corresponding application in the coming weeks, so approval could take place at the end of 2023.
Comcast: The papers of the US cable network operator also climbed by a good eight percent after the balance sheet was presented.
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