Tech stocks set new record highs
With new records, S&P 500 and Nasdaq begin the new trading week. However, US investors are in search of new impulses that Fed Chair Powell could provide during his testimony.
Wall Street ended the week with little change. S&P-500 and Nasdaq-Composite opened at new record highs, but they were only slightly above the previous week's record levels. The market was lacking new impulses, as stated. These will come in the course of the week with new US inflation data, Powell's testimony before Congress, and earnings reports from large US banks.
"This week has a lot to process. If the markets want rate cuts in September, there's still more progress needed on inflation," said Market Strategist Jim Reid of Deutsche Bank. The labor market data from Friday didn't provide many new insights for the interest rate debate. However, they didn't contradict the possibility of a September rate cut either.
The Dow Jones Index lost 0.1 percent to 39,345 points. The S&P-500 and Nasdaq-Composite rose 0.1 percent and 0.3 percent, respectively. There were 1,541 (Friday: 1,236) gainers, while 1,294 (1,552) losers opposed them. 56 (89) titles remained unchanged.
Dollar little changed - Oil prices with deductions
There was little movement at the currency market, with the Dollar Index barely in the positive territory. The Euro initially suffered losses but showed no significant change on the day. It appears that risks were priced in regarding the outcome of the French parliamentary elections. "The worst scenario for the Euro, a clear victory for the Euroskeptic Right, was avoided," said Analyst Ricardo Evangelista of Activtrade.
At the oil market, Brent and WTI futures fell by up to 1.1 percent. In trading, reference was made to renewed ceasefire talks in the Gaza Strip. Additionally, Hurricane Beryl had weakened into a tropical storm. The impact on refinery activities seems minimal, and the impact on offshore production is expected to be contained, according to Ritterbusch Analysts.
Hope for September above 70 percent
The bond market showed unevenness after the rally at the end of the week. Some participants took profits. The market is waiting for Powell's testimony. Investors will be looking for signs that the latest inflation and labor market data, which came in weaker than expected, could persuade Fed members to adopt a more dovish stance. The probability of a September rate cut, according to CME, remains above 70 percent.
With the significantly increased market interest rates, the gold price fell. An ounce of gold declined by 1.3 percent to $2,359. "The interest in gold seems to have waned," said JP Morgan Global Commodities Research. "Prices fell at the beginning of the week after the Chinese central bank, PBoC, reported unchanged gold reserves for the second month in a row in June."
Boeing admits guilt
Boeing acknowledged responsibility in a court filing for the crashes of Lion Air Flight 610 and Ethiopian Airlines Flight 302, which killed 346 people. The company stated that the MCAS (Maneuvering Characteristics Augmentation System) was the cause of the accidents. Boeing also pledged to cooperate fully with the investigation and to take steps to prevent such incidents from happening again.
Boeing will formally acknowledge the misleading of regulatory authorities prior to two fatal 737-Max crashes in a plea deal. As part of a settlement, the prosecution has requested that the company pay a second fine of 244 million dollars and disburse 455 million dollars over the next three years to improve its compliance and safety programs. However, the agreement with the victim's families falls short of the intended restitution. The stock price increased by 0.5%.
Intel (+6.2%) led the list of gainers in the Dow Jones Index. Traders were reportedly seeking stocks related to AI. Nvidia gained 1.9%, and Advanced Micro Devices declined 4%.
Pharmaceutical company Eli Lilly (+0.4%) is acquiring biopharmaceutical company Morphic Holding for 3.2 billion US dollars.
Paramount Global (+2.7%) has agreed to a merger deal with Skydance Media. Skydance and investor RedBird Capital Partners have agreed to pay over 8 billion dollars to acquire National Amusements, Paramount's majority shareholder, and invest in the new Paramount. However, much had to have already been priced in with the recent headlines.
Lucid's stock price rose by 7.8% after the company profited from price drops in the currently challenging market for electric vehicles in the second quarter. Lucid increased its deliveries in the second quarter to 2,394 vehicles from 1,404 in the same period last year. The company had sold 1,967 cars in the first quarter. Production slightly decreased in the quarter.
Ideaya Biosciences surged 15.3% after the company announced positive clinical data. Corning's stock price rose 12% after the company raised its earnings forecast.
For all other news on today's stock market activity, see here.
The Fed Chair Powell's testimony before Congress is anticipated by investors, as they hope for indications that weaker-than-expected inflation and labor market data could sway Fed members towards a more accommodative interest rate policy. Despite the Dow Jones Index experiencing a minor decline, the S&P-500 and Nasdaq-Composite still followed a positive trend, with Powell's testimony and earnings reports from major US banks expected to provide new impulses for the economy.
