Wall Street remains in good spirits

Hopes of falling interest rates in the new year are keeping US investors upbeat. However, the first doubts are emerging as to whether expectations may already be exaggerated. The Dow reaches its next record high.

Wall Street ended the week with slight gains. The Dow Jones index reached another all-time high of 37,393 points. The S&P 500 and the Nasdaq Composite rose to new highs for the year. Sentiment continued to be buoyed by the prospect of falling interest rates in 2024, although market observers warned that expectations were already very far ahead of central bankers' projections.

The Dow Jones index gained one point to 37,306, the S&P 500 rose by 0.5 percent and the Nasdaq Composite increased by 0.6 percent. The Nyse saw 1,437 (Friday: 908) price gainers, compared with 1,398 (1950) losers. A total of 66 (84) stocks closed unchanged.

Market expert Stephen Innes from SPI Asset Management expects risk appetite, fueled by the US Federal Reserve, to take a break for the time being. Fundstrat countered that equities are currently also being supported by purchases by fund managers who were concerned about the macroeconomic environment and therefore acted excessively defensively until recently. "If we think about the last two weeks of 2023, it tells us that there will be a certain amount of performance hunting between now and the end of the year," the financial market experts said.

United States Steel bullish with takeover by Nippon Steel

Among the individual stocks, United States Steel jumped 26.1 percent to 49.59 dollars. Japanese competitor Nippon Steel is buying the US steel group for 14.1 billion dollars or 55 dollars per share in cash. The purchase price includes a premium of 40 percent on Friday's closing price.

Apple fell 0.9 percent, weighed down by a Bloomberg report that more Chinese government agencies and state-supported companies are said to have instructed their employees not to bring Apple iPhones and other foreign devices to work. Apple is also expected to halt sales of the newer versions of its smartwatch in the coming days. The company is preparing to comply with a ruling by the US Commission on International Trade regarding a possible patent infringement.

Amazon shares rose by 2.7 percent. According to sources, the group is in talks about an investment in the largest regional sports program provider in the USA, Diamond Sports. This would further advance the Group's push into the sports content sector, where it is competing with streaming rivals such as Disney and Netflix.

Adobe gained 2.5 percent. The company canceled its planned 20 billion dollar takeover of Figma. IBM (up 0.3 percent) benefited slightly from the fact that Software AG is selling two key divisions to the IT giant for a total of 2.13 billion euros following the takeover by financial investor Silver Lake.

Oil prices rise significantly

The political tensions in the Middle East and in particular the recent attacks on ships in the Red Sea drove up oil prices. According to a Reuters report, Russia has also announced that it will further reduce its oil exports in December. Brent and WTI prices rose by up to 2.0 percent.

On the bond market, yields recovered somewhat from the recent falls. The ten-year yield rose by 3.7 basis points to 3.95 percent, compared with almost 5 percent in mid-October. According to the CME's FedWatch, 66% of the markets expect the US Federal Reserve to cut interest rates for the first time in March. Bank of America now expects interest rate cuts of 100 basis points next year, compared with 75 basis points previously.

The dollar was little changed. The greenback could fall further by the end of the year after the US Federal Reserve signaled that it is considering interest rate cuts next year, according to MUFG currency analyst Lee Hardman. With the ECB and Bank of England still reluctant to discuss rate cuts, there is a "window of opportunity for dollar selling into the end of the year". However, the "weak global growth outlook" remains supportive for the dollar, which should recover in the first quarter. The price of gold recorded a slight gain. The troy ounce rose by 0.3 percent to 2027 dollars. The precious metal was thus able to distance itself somewhat from the 2000 dollar mark.