The Dow Jones benchmark index limited its gains to 0.3 percent to 33,220 points from a previous 0.6 percent. The broader S&P 500 was up 0.6 percent to 3,846 points, compared to a 1.1 percent gain before the release. The index of the technology exchange Nasdaq was 0.6 percent higher at 10,451 positions after previously also 1.1 percent.
Hopes for the end of the Fed’s XXL interest rate hikes had previously boosted US government bonds. The yield on the 10-year bond fell to 3.715 percent from 3.792 percent on Tuesday.
Portfolio manager Dickie Hodges from the investment bank Nomura considers the prospects for the bond markets in the new year to be “almost consistently positive”. In the short term, the upward trend will probably be interrupted for the time being.
The major central banks would still have to deal with unacceptably high inflation. “But the need to keep raising interest rates will soon disappear. And when the Federal Reserve finally tells us that it has stopped raising interest rates, then the bond market rally will be truly sustainable.”
Falling bond yields helped tech stocks like Netflix, Apple and graphics card maker Nvidia gain between 2.3 percent and 4.2 percent. According to experts, rising inflation and higher interest rates will devalue future profits for high-growth tech companies.
US stock market expert Koch: “The stock market is hanging on the ropes”
At the same time, oil prices fell. “Warning signs of a global recession, China’s lackluster recovery with rising Covid-19 cases, renewed strength in the US dollar and subdued risk sentiment are all triggering factors that kept oil prices captive overnight,” said Yeap Jun Rong, market analyst at IG.
The North Sea oil variety Brent and the US variety WTI increased their losses on Tuesday and were each a good four percent lower at 78.66 and 73.62 dollars per barrel (159 liters).
The spin-off of the medical technology business has paid off for the shareholders of the US conglomerate General Electric (GE). GE HealthCare shares rose a good five percent to $58.88 on their first day of trading. GE shares also gained 3.8 percent.
Look at other individual values:
Coinbase: In a $100 million settlement, the company settles a dispute with the New York financial regulator over alleged violations of money laundering laws. The share rose by 12.4 percent. Regulators fined the crypto exchange $50 million. Coinbase has also committed to investing $50 million in measures to prevent criminals from abusing the platform. Coinbase allowed users to open accounts without sufficient identity verification.
Chinese papers: Meanwhile, hopes for a long-term recovery from the recent coronavirus outbreak in China supported shares in US-listed Chinese companies. The prices of the tech companies Alibaba, JD.com and Baidu rose by up to 15.1 percent. The China optimism also inspired the coffee house chain Starbucks. The coffee maker’s shares rose 3.5 percent to $104.40. Cowen analysts raised the price target to $112 from $104 previously on anticipation of a Chinese economy pick-up.
Merck: The stock rose 3.7 percent after being upgraded from neutral to buy by Bank of America. Analysts cited the company’s steady revenue growth as well as the significant progress it has made in strengthening the position of its cancer drug Keytruda and mitigating the impact of patent expiry.
Microsoft: A downgrade puts pressure on the title of the software group. The shares lose 4.3 percent to $ 229. UBS analysts have downgraded the shares to neutral from buy and lowered the price target to $250 from $300 previously. After the boom in working from home, a slowdown in growth is expected for the cloud technology Azure and the Office program package, according to the analysts.
Pfizer: Shares of the pharma giant fell 1.6 percent after being downgraded from “buy” to “neutral” by Bank of America. One of the reasons for the downgrade was uncertainty about the extent of the decline in sales of the drugs Covid, Comirnaty and Paxlovid.
Starbucks: An increase in the price target boosts the US coffee house chain Starbucks. The coffee maker’s shares rose 3.5 percent to $ 104.31. Cowen analysts raised the price target to $112 from $104 previously. The reason for the decision is the start of the Chinese economy after the end of the corona restrictions, according to the analysts.
target: Wells Fargo had downgraded the stock from overweight to equal weight. The retail giant’s paper still gained 1.5 percent. According to Wells Fargo, Target’s prospects have deteriorated. In view of the general economic uncertainty, the share does not represent an attractive investment.
Tesla: The share gained 3.8 percent after falling 12 percent the day before. The electric vehicle maker missed expectations for fourth-quarter delivery and production numbers on Tuesday.
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