Fed Chairman Powell causes new interest rate fears
US investors are once again in the grip of fear. Hopes that the Fed has already reached its interest rate peak are dashed by the top monetary policymaker with a clear line: if necessary, monetary policy will be tightened further, says Powell.
Wall Street closed down in the evening. The stock markets were burdened by rising market interest rates. The Dow Jones index closed 0.6 percent lower at 33,892 points. The S&P 500 fell by 0.8 percent. The Nasdaq Composite was down 0.9 percent. There were a total of 742 (Wednesday: 1200) price gainers and 2143 (1649) price losers. A total of 43 (106) stocks closed unchanged.
The focus was on statements made by US Federal Reserve Chairman Jerome Powell at a panel discussion at the International Monetary Fund. Powell said that future progress in the fight against inflation may have to be achieved by limiting demand. While the Fed is satisfied with its success so far in easing price pressures, it is not sure that interest rates are high enough to bring inflation down to the 2 percent target in the long term, he said. The Fed will not hesitate to raise interest rates further if necessary, said the Fed President. Nevertheless, the Fed will exercise caution in its future decisions, as the US central bank does not want to be misled by a few good months of data, nor does it want to run the risk of over-tightening.
On the bond market, yields had already risen more sharply in the run-up to Powell's speech and rose a little further afterwards. An auction of 30-year debt instruments with a volume of 24 billion dollars met with weaker than expected demand. The yield on 30-year paper rose by 16.0 basis points to 4.78 percent, while the yield on 10-year paper rose by 13.8 basis points to 4.63 percent. The previous day, the new issue of ten-year government bonds with a volume of 40 billion dollars had been relatively well received. In terms of economic data, only the initial jobless claims from the previous week were published. These were slightly lower than expected.
Cost cuts at Disney are well received
Walt Disney 's business figures contained light and shade, but the entertainment group is making faster progress with its cost-cutting measures than expected. The share price rose by 6.9 percent. Tapestry rose by 3.0 percent. The parent company of leather accessories and shoe brands Coach, Kate Spade and Stuart Weitzman missed expectations with sales in the first quarter and gave a rather pessimistic outlook. However, the fact that Tapestry was able to implement price increases was received positively. The gross margin was also convincing.
The donut chain Krispy Kreme is sticking to its outlook despite weak sales and earnings figures in the third quarter. Nevertheless, the share price fell by 6.6 percent. Beyond Meat recorded a surprisingly significant drop in turnover in the third quarter due to falling demand for plant-based meat substitutes. Nevertheless, the company managed to reduce its loss more than analysts had expected. The share price advanced by 2.4 percent. Bloom Energy 's share price jumped 8.4 percent. The provider of alternative energies exceeded market expectations with sales and earnings in the third quarter.
Following the statements made by Jerome Powell, Wall Street's share prices continued to shrink due to rising market interest rates. The Dow Jones index, S&P 500, and Nasdaq Composite all saw decreases, with the Dow Jones closing 0.6% lower at 33,892 points. Jerome Powell, as the Fed Chairman, indicated that future inflation battles might require curbing demand, sending waves of apprehension amongst investors. Furthermore, the Fed, led by Powell, is open to tightening monetary policy further if needed, reflecting the persistent inflation concerns.
Source: www.ntv.de
