Wall Street on the upswing at the start of the new quarter
At the start of the week, speculation about decreasing interest rates in the US prompted investors to reach out to stocks. The TV debate between Biden and Trump also continues to impact Wall Street.
To kick off the new quarter, which is also a shortened US stock market week due to holidays, and with the US labor market report for June only being released on Friday, the indices went up on Monday. On Wednesday, there will be limited trading in the US, and on Thursday, July 4th, business will be closed for Independence Day.
Disappointing economic data fizzled out: The ISM Purchasing Managers Index for the manufacturing sector fell unexpectedly deeper into the contraction signaling region in June.
The rising yields on US Treasury bonds continued to surprise despite the weak economic data. Spekulation about lower taxes and higher government spending from the presidential candidates Biden and Trump contributed to the rising yields, it was reported.
The Dow Jones Index rose by 0.1 percent to 39,170 points, the S&P 500 by 0.3 percent. Technology stocks were favored, with the Nasdaq Indices gaining up to 0.8 percent. At the NYSE, there were 887 (Friday: 1,625) winners and 1,926 (1,199) losers. Unchanged closed 62 (55) titles. Merck & Co (+3.3%) and Apple (+2.9%) led the way in the Dow, with no new news.
Boeing buys back Spirit Aerosystems into the conglomerate
Boeing gained 2.6 percent. The aircraft manufacturer is buying Spirit Aerosystems for a total of $4.7 billion (+3.3%). Boeing is also reportedly planning to admit fault for misleading regulatory authorities regarding the 737 Max crashes. By the end of the week, Boeing is expected to have time to come to terms with the past incidents and pay a $243 million fine.
The banking sector went up by almost 1 percent as the major US banks, as expected, announced higher dividends following the successful stress test by the US Federal Reserve. The increasingly attractive market interest rates also supported the sector.
Tesla (-0.6%) announced in advance of the usual second day of a new quarter's reported delivery numbers for the previous quarter, a 6.1 percent increase. Support came from Wells Fargo. The analysts there added Tesla to their "tactical ideas" list, despite keeping the stock rated "Underweight." With the strong price increase, Tesla surpassed the 200-day moving average for the first time since January, which is considered a positive sign.
Blackrock (-0.6%) announced that the asset manager is taking over British data provider Preqin for $3.2 billion.
Volatility occurred with Chewy. The stock of the pet supplies retailer initially rose but closed 6.6 percent lower. The influential retail investor and meme stock advocate Keith Gill only caused a stir with the disclosure that he holds 6.6 percent of Chewy.
Meta changed little. The EU Commission accused the Facebook Inc. conglomerate of violating EU regulations for digital companies. Similar accusations have recently been made against Apple.
Trump Media & Technology gained 1 percent, after the Supreme Court ruled that former presidents have absolute immunity from prosecution for official actions in office.
Cruise line stocks dropped, as Hurricane Beryl hit Grenada, a popular cruise destination in the Caribbean. Carnival and Norwegian Cruise Line each dropped around 5.5 percent.
Euro up then down
The Dollar showed little change against the Euro, after the Euro gave back initial gains. The Euro cost 1.0738 Dollars lastly. In early trading, it had risen slightly following the result of the first round of the French election. The Euro had benefited from the hope that the far-right Rassemblement National would not gain an absolute majority in the second and decisive voting round, it was reported.
Oil prices surged up to 2.3 percent. The concern that the confrontation between Israel and Hezbollah could draw in other countries into the conflict, the expectation of a strong summer demand for gasoline, and the first signs of an active hurricane season had driven up the prices, according to trading.
In light of the rising yields on US Treasury bonds, speculation about lower taxes and higher government spending from presidential candidates Biden and Trump contributed significantly to the rise. Despite the unfavorable economic data, Wall Street stocks, such as the Dow Jones and S&P 500, continued to perform well, with technology stocks leading the way.
The banking sector also saw an improvement, with major US banks announcing higher dividends and the sector being supported by the increasingly attractive market interest rates.
