Concerns about interest rate hikes weighed on the mood on the US stock exchanges.
(Photo: AP)
Frankfurt Strong jobs data dashed investors’ hopes of a slower pace of interest rates in the US, weighing on Wall Street on Friday. In addition, skeptical economic statements by Tesla boss Elon Musk discouraged investors.
The Dow Jones index of standard values closed 1.1 percent lower at 32,899 points. The tech-heavy Nasdaq fell 2.5 percent to 12,012 points. The broad S&P 500 lost 1.6 percent to 4108 points.
US companies created 390,000 new jobs, economists polled by Reuters had only expected 325,000. According to experts, the US Federal Reserve should feel confirmed in its interest rate hike cycle and will not take a break in September, as some investors had hoped. “(This report) gives the Fed permission to continue raising interest rates because the job market is strong. They can worry more about inflationary pressures and less about the labor market,” said Anthony Saglimbene, global market strategist at Ameriprise Financial.
The dollar received a tailwind from the interest rate outlook. The dollar index, which measures the currency against other major currencies, rose 0.3 percent to 102.15 points. The euro fell as low as 1.0718 from $1.0730 previously. Some analysts continue to see the dollar at an advantage in the currency markets. The Fed’s tightening cycle is based, they say, on a more resilient growth story than Europe’s, particularly after Russia’s oil embargo, which could hurt the eurozone economy.
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On the crude oil market, Brent from the North Sea was 3.1 percent higher at $121.27 per barrel (159 liters) after the OPEC+ export cartel announced a surprisingly significant increase in production by 648,000 barrels per day. According to stockbrokers, however, this is not enough to counteract the shortage of supply on the world markets. After the end of most corona restrictions in China, demand for the raw material will increase rapidly there.
Individual values in focus
Tesla: Tesla shares plummeted more than 9 percent. Musk wants to reduce the workforce at the electric car manufacturer by around ten percent, he has a “super bad feeling” about economic development. Tesla is trying to stay ahead of slower deliveries this year and protect margins from an economic slowdown, said Dan Ives, equity researcher at Wedbush Securities.
US stock market expert Koch: “Comment by Elon Musk weighs on Wall Street”
Twitter: The planned takeover of the short message service Twitter by Musk was again a topic in the trading rooms on Friday. After a regulatory waiting period for the planned $44 billion takeover, Twitter papers were up 0.6 percent.
Apple: Apple shares lost about 3.9 percent. According to insiders, the EU countries and MEPs are about to agree on uniform charging connections for smartphones, tablets and headphones, which runs counter to the interests of the iPhone manufacturer. In addition, a negative analyst comment weighed on the papers.
Kohl’s: In anticipation of a bidding war for Kohl’s, however, investors got into the US department store chain. Shares rose about 0.7 percent to $41.48. According to the Wall Street Journal, financial investor Sycamore is offering about $55 per Kohl’s share and private equity firm Franchise Group is offering about $60. A takeover would have a total volume of seven to eight billion dollars.
BMS: The focus was also on a takeover project. After the bid by the pharmaceutical company Bristol-Myers Squibb (BMS) for the cancer specialist Turning Point Therapeutics, its share price more than doubled to $74.59. BMS is offering $76 in cash for all outstanding Turning Point shares, or $4.1 billion in total. The BMS share itself was almost unchanged.
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