new York Hopes of another sharp drop in US consumer prices are buoying Wall Street sentiment. The Dow Jones index of standard values closed 0.8 percent higher at 33,973 points on Wednesday. The tech-heavy Nasdaq advanced 1.8 percent to 10,931 points. The broad S&P 500 gained 1.3 percent to 3969 points.
The official US inflation data, which investors have been eagerly awaiting for days, is due on Thursday. After five straight months of declining annual rates, further weaker reading could pave the way for fewer Federal Reserve rate hikes or even rate cuts later in the year, said Craig Erlam, a market analyst at trading house Oanda.
However, portfolio manager Thomas Altmann from asset manager QC Partners urges caution. “A month ago, the sharper-than-expected fall in inflation sparked an impressive rally. After the recent gains, however, it is unlikely that this will be repeated.” In addition, the reporting season with the major US banks Bank of America, Citigroup, JP Morgan and Wells Fargo picked up speed on Friday. “And the earnings season has the potential to dictate stock market direction in the coming weeks,” Altmann said.
Oil price rises – tech stocks follow bonds into the plus
The optimism is also affecting the oil market, Erlam said. The North Sea variety Brent and the light US variety WTI climbed by around three percent to 82.44 and 77.29 dollars per barrel (159 liters) respectively. Investors also grabbed bonds. The yield on ten-year US Treasuries fell to 3.533 percent from 3.619 percent last time. That helped tech stocks like Amazon, Apple Microsoft and Google’s parent Alphabet soar by as much as 5.8 percent. According to experts, rising inflation and higher interest rates will devalue future profits from these high-growth companies.
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In terms of individual values, US airlines are turning positive after solving a massive disruption in air traffic. American Airlines, Spirit Airlines, Delta Air Lines and JetBlue Airways stocks rose between 0.2 and 1.8 percent. The pilot system of the US aviation authority FAA crashed during the night, after which domestic flights had to remain on the ground. Because of the system crash, almost 1,000 flights were canceled and more than 6,000 flights were delayed.
At the same time, speculation about a takeover provided momentum for the ailing US furniture store Bed, Bath & Beyond. The stock jumped more than 68 percent to $3.49.
A possible agreement to build a production facility in Indonesia with a capacity of one million cars gave Tesla investors access. The shares of the US electrical manufacturer rose by 3.7 percent. Tesla is close to an agreement in Indonesia, the Bloomberg news agency reported. The responsible Indonesian minister has confirmed talks between his country and Tesla, it said. Rivals Lucid, Rivian and Fisker also rose by up to a good ten percent in Tesla’s wake.
Meanwhile, disappointing quarterly earnings weighed on Intiutive Surgical shares. The titles of the US manufacturer of computer-aided operating systems lost a good four percent.
Look at other individual values:
CarMax: The shares of the used car dealer rose by 0.6 percent. US bank JP Morgan downgraded the stock to “underweight” as investors have not fully priced in the risks surrounding the company and hopes for a recovery appear “premature”. CarMax is down 53 percent in 2022 but is up 18 percent since disappointing quarterly results in December.
Tesla: The papers rose 3.68 percent to $ 121.59. The planned expansion of the Gigafactory in Austin, Texas attracted investors, as did a possible agreement to build a production facility in Indonesia with a capacity of one million cars. Tesla is close to an agreement in Indonesia, the Bloomberg news agency reported. The responsible Indonesian minister has confirmed talks between his country and Tesla. Rivals Lucid, Rivian and Fisker also rose by up to a good nine percent in Tesla’s wake. Separately, Goldman Sachs also named the stock as a top pick for 2023.
Levi Strauss & Co: The US bank Citi downgraded the stock from “buy” to “neutral”. The apparel company’s stock fell 1.7 percent. A weaker trend in jeans is likely to put the company under pressure in the short to medium term. was the reason.
Warner Bros Discovery: Guggenheim upgraded the media company’s stock from “neutral” to “buy” on Wednesday, citing an attractive risk-reward ratio and business development in the first half of the year. Warner Bros. Discovery shares rose 0.3 percent after gaining eight percent on Tuesday.
Walt Disney: The company revised its pricing policy at domestic theme parks and made a number of changes to its reservation and ticketing system, as well as perks for annual pass members. This should make it easier for loyal customers to visit. The shares rose by 0.8 percent.
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