Dow continues to drag on
Hopes of a series of interest rate cuts by the Fed continue to support the stock markets on the penultimate trading day of the year. Expectations are being fueled by the weekly labour market data. However, this is not enough for price fireworks, and overall trading is rather sedate.
The interest rate hopes of US investors have also supported Wall Street in the uneventful period between the years. The Dow Jones index of blue chips closed 0.1 percent higher at 37,710 points. The technology-heavy Nasdaq was little changed at 15,095 points. The broad-based S&P 500 also ended trading little changed at 4,783 points.
Support in 2023 was provided by hopes of interest rate cuts by the Fed in the near future and a "soft landing" for the US economy, as well as the hype surrounding artificial intelligence (AI). "I believe that the market will continue to rise in the near future," said Victoria Fernandez, Chief Strategist at investment firm Crossmark in Texas. However, she also pointed out longer-term risks: "Inflation will continue to fall, but probably not as quickly as the market expects."
The latest US jobs data, among other things, created a positive mood. The rise in weekly initial claims for US unemployment benefits to 218,000 from 205,000 was above the average analyst forecast of 210,000. "The data shows some slowing, which suggests an earlier change in Fed policy," said Thomas Hayes, chairman of private equity firm Great Hill Capital. The monetary authorities are trying to keep inflation in check and cool down the hot labor market by tightening monetary policy.
Oil prices under pressure
The oil market also experienced ups and downs due to low liquidity. After initially stabilizing, prices for North Sea Brent and US light oil WTI were down between 1.6% and 2.9% at 78.38 and 71.98 dollars per barrel (159 liters). Investors kept an eye on the situation in the Red Sea. Following attacks by the Iranian-backed Houthi militia in Yemen, major shipping companies had ordered a temporary halt to these routes. However, there are increasing signs that this could soon be lifted. Maersk, for example, is planning several dozen container ships for the coming days and weeks via the Suez Canal and the Red Sea. Concerns about shipping in the Red Sea have eased, but worries about tensions in the Middle East, particularly Iran's involvement in the region, remain, said Hiroyuki Kikukawa of NS Trading. n
Among individual stocks, US-listed shares of Chinese companies rose in the face of above-average foreign inflows. The shares of JD.Com and Alibaba rose by 2.7 and 1.5 percent respectively.
In contrast, CytoSorbents flew out of the portfolios. The pharmaceutical company's shares plummeted by more than 33 percent. CytoSorbents' device for reducing bleeding during operations failed to meet the targets of a clinical trial.
Meanwhile, US aircraft manufacturer Boeing 's problems with the 737 MAX model continue. The shares of Airbus' arch-rival crumbled by just under one percent. The US Federal Aviation Administration (FAA) announced that Boeing had asked airlines to check newer 737 MAX aircraft for a possible loose screw in the rudder control system. The FAA wants to "closely monitor" the targeted inspections and consider additional measures in the event of further discoveries of loose or missing components.
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The Dow Jones index, being a gauge of large publicly-owned companies, also experienced growth during this period, closing 0.1% higher at 37,710 points. Despite the Fed's interest rate hopes and positive market data, overall stock trading remained relatively subdued, with the tech-heavy Nasdaq and broad-based S&P 500 also closing little changed.
In addition to the Dow Jones, Wall Street as a whole has been supported by various factors, including expectations of interest rate cuts, a "soft landing" for the US economy, and the hype surrounding AI. As Victoria Fernandez, Chief Strategist at Crossmark, stated, "I believe that the market will continue to rise in the near future," although she also noted potential longer-term risks.
Source: www.ntv.de
