US stock markets remain in the green
After the previous day's rally, US investors remain cautiously optimistic on Wednesday. The fact that a US shutdown has been averted for the time being is also contributing to the positive mood. The Dow temporarily climbs above 35,000 points and closes higher. Among the individual stocks, Target is soaring.
On Wall Street, the upward trend continued at a slower pace in the middle of the week. After the lower-than-expected US inflation data the previous day reinforced hopes that the interest rate peak had been reached, a shutdown in the US has now also been averted. The US House of Representatives has voted in favor of a temporary budget. The Senate's approval and President Joe Biden's signature are still pending. The Dow Jones index closed 0.5 percent higher at 34,991 points after temporarily trading above 35,000 points. The S&P 500 and the Nasdaq Composite rose by 0.2 and 0.1 percent respectively.
Retail sales, on the other hand, did not trigger any major market reaction. The month-on-month decline was 0.1 percent, while economists had expected a drop of 0.2 percent. The fact that producer prices were lower was only seen as confirmation of Tuesday's inflation data. Business activity in the manufacturing sector in the New York metropolitan area rose significantly in November, contrary to the forecast.
"In light of weaker consumer prices, investors have significantly reduced the likelihood of another rate hike in this cycle," said Deutsche Bank Research. The markets had even increased the probability of a rate cut by the US Federal Reserve, with that of a rate cut in May rising from 23 percent on Monday to 86 percent at the close of trading on Tuesday, the analysts said.
Oil prices fall
The US dollar recovered only slightly from the previous day's heavy losses. The dollar index rose by 0.4 percent after falling by 1.5 percent the previous day following lower-than-expected inflation data.
Oil prices fell. Brent and WTI prices fell by up to 2.2 percent. The weekly oil storage data showed a significant build-up. However, industry data published late on Tuesday had already pointed to an increase in inventories.
Yields on the US bond market saw a countermovement after the steep fall on Tuesday. The yield on ten-year paper improved by 9.5 basis points to 4.54%. Nevertheless, the markets remain confident that the Fed will not raise interest rates again and bets on an imminent transition to interest rate cuts are increasing, according to reports. Thursday's weekly initial jobless claims are also likely to confirm a slowdown in the labor market, participants expect.
Target rose 17.8 percent. The retailer said comparable sales fell 4.9 percent in the quarter ended Oct. 28 from a year earlier - less pronounced than the 5.2 percent decline analysts had expected.
Getty Images lost 1.6 percent. The picture agency lowered its outlook for 2023 in light of various challenges such as the strikes in Hollywood and the stronger dollar. Cisco only announced its results for the first quarter after the end of trading. After the network equipment provider lowered its revenue forecast for the current year, the shares fell by 9 percent in after-hours trading.
Source: www.ntv.de
