US stock markets approach record highs

Oil price falls

2023 December 12 . 11:50 PM

2 min read

Good mood before the holidays on Wall Street..aussiedlerbote.de

US stock markets approach record highs

After small losses at the start, Wall Street recorded moderate gains on Tuesday - and they are adding up. The US indices are slowly taking aim at their record highs. The eagerly awaited November inflation data is almost exactly as forecast.

The Dow Jones Industrial has risen just below the 36,600 mark and marked another high since the beginning of 2022. The record high of just over 36,950 points is now within reach. The Nasdaq 100 also closed at a new high for almost two years and is now only two and a half percent below its high reached at the end of November 2021. The broad-based S&P 500 advanced 0.5 percent to 4643 points.

Consumer prices rose by 3.1 percent, slightly slower than the 3.2 percent rise in October. Economists polled by Reuters had expected this. However, investors had hoped for a stronger decline, which could give the US Federal Reserve reason to cut interest rates soon. Analysts were cautious. The data did point in the direction desired by the Fed, which could prompt the monetary authorities to ease monetary policy in the course of the coming year, said Chris Larkin from broker E*Trade. "However, the Fed has made it very clear that it considers the risk of cutting rates too early to be higher than that of keeping rates high for an extended period."

Around 40% of market participants currently assume that the key interest rate in the US will fall again at the Fed meeting in March. Three quarters expect an easing in May. Interest rate cuts in the summer, on the other hand, are considered almost certain. Commerzbank experts Christoph Balz and Bernd Weidensteiner wrote that the current market expectations are likely to go too far for the taste of the monetary authorities. "It is therefore to be expected that Fed Chairman Powell will try to dampen speculation about interest rate cuts at the press conference after tomorrow's meeting."

The dollar index lost 0.3 percent to 103.797 points. In turn, the euro advanced 0.3 percent to 1.0796 dollars. Oil prices continued their slide. North Sea crude Brent and US light oil WTI both fell by around 3.5 per cent to 73.37 and 68.73 dollars per barrel (159 liters) respectively. An attack by Houthi rebels in Yemen on a cargo ship near the Red Sea had previously driven up prices.

The slump in oil prices depressed the shares of energy companies such as Chevron, ExxonMobil and Marathon Oil, which lost between 1.3 and 2.9 percent. Oracle fell by 12.4 percent. The SAP competitor missed its sales targets due to comparatively weak demand for cloud products. In the face of stubborn inflation and higher borrowing costs, companies are currently cutting their spending on IT products such as the data cloud.

The shares of e-car manufacturer Lucid also flew out of the portfolios, losing around 8.5 percent. The departure of CFO Sherry House did not go down well with investors. A downgrade depressed the shares of Airbnb. The shares of the accommodation provider fell by 1.7 percent. The experts at the major British bank Barclays had downgraded them to "Underweight" from "Equal weight". The reason was growing competition.