Wall Street in a festive mood ahead of Thanksgiving
One day before Thanksgiving, the US stock markets are moving forward. Robust economic data put traders in a good mood. Among equities, Nvidia is in the spotlight after the chip manufacturer presented surprisingly strong figures.
A series of encouraging economic data put US investors in a buying mood. The US Dow Jones blue-chip index closed 0.5 percent higher at 35,273 points on Wednesday. The technology-heavy Nasdaq advanced 0.5 percent to 14,265 points. The broad-based S&P 500 gained 0.4 percent to 4556 points. The dollar index, which reflects the exchange rate against major currencies, also advanced after its slide in recent weeks, gaining 0.3 percent.
Stock trading in New York is suspended on Thursday due to the Thanksgiving holiday and trading hours are shortened on Friday. Investors interpreted the surprisingly sharp fall in initial claims for US unemployment benefits and the good mood among consumers as a sign that the Fed's cycle of interest rate hikes will soon come to an end. Investors brushed aside the hint of a rate hike before the end of the year in the minutes of the Fed's most recent monetary policy meetings. Instead, they are betting on four cuts in the coming year, said Niels Christensen, chief analyst at Nordea Bank. "It's not unusual for the Fed to start such a cycle with a move of half a percentage point."
Another sentiment booster is the drop in energy prices, said Art Hogan, chief investment strategist at financial services firm B. Riley. US crude oil WTI fell by 1.3 per cent to 76.75 dollars per barrel (159 liters) after the "Opec+", which includes the members of the export cartel as well as other producing countries such as Russia, surprisingly postponed a planned meeting. According to a media report, there are differences of opinion between individual members regarding production policy.
In terms of share prices, Nvidia was in the spotlight. The world's most valuable chip manufacturer presented surprisingly strong figures thanks to the high demand for special processors for artificial intelligence (AI). However, due to the US embargo against China, the company was cautious about its business with the People's Republic. However, with the planned development of semiconductors exclusively for this market, Nvidia could manage the balancing act of complying with the US restrictions while avoiding a slump in sales, said analyst Konstantin Oldenburger from online broker CMC Markets. Nvidia shares nevertheless slipped by 2.4 percent. However, this was still around 240 percent above the level at the turn of the year.
Shares in Deere & Co. also fell, with a drop of seven percent at times, their biggest fall in around a year and a half. Although the agricultural machinery manufacturer presented a surprisingly strong quarterly result, the outlook for the coming year was disappointing, commented analyst Michael Shlisky from research firm D.A. Davidson. Guess shares fell by more than twelve percent. Analyst Corey Tarlowe from investment bank Jefferies criticized that the fashion brand known for its jeans had reported a quarterly profit below market expectations despite improved profit margins. In addition, the cautious outlook for the important Christmas business clouded the mood.
Source: www.ntv.de
