Wall Street scales new heights in triple steps

Everyone is hoping for the Fed

2023 December 27 . 11:30 PM

3 min read

The mood on Wall Street remains optimistic..aussiedlerbote.de

Wall Street scales new heights in triple steps

After the small Christmas rally of the previous day, the good mood on Wall Street continues. The firm belief that interest rates will soon be cut even lifted the Dow Jones Index and Nasdaq-100 to all-time highs. Meanwhile, the price of gold continues to climb.

The cautious interest rate optimism of US investors continues in the uneventful period between Christmas and New Year. The Dow Jones index of blue chips closed 0.3 percent higher at 37,656 points on Wednesday. The technology-heavy Nasdaq advanced 0.2 percent to 15,099 points, with both indices even reaching all-time highs in the meantime. The broad-based S&P 500 gained 0.1 percent to 4,781 points. The indices thus defended their recent gains against the backdrop of the Fed's hoped-for interest rate cuts.

All three major Wall Street barometers had gained over the course of the day, with the S&P 500 reaching its highest level since January 2022. "While I'm not entirely sure about the timing of the rate cuts, the Fed is clearly in the process of easing monetary policy, and that's positive for the market as a whole," said David Waddell, group president and chief investment strategist at asset manager Waddell and Associates.

Meanwhile, hopes of falling interest rates put pressure on the US currency. The dollar index crumbled by half a percent to a five-month low of 100.994 points. In contrast, the euro climbed by 0.6 percent to 1.111 dollars. Meanwhile, the weaker US currency and robust China data helped metal prices to rise.

Prices on the oil market fell again. North Sea crude Brent and US light oil WTI both fell by around two percent to 79.44 and 73.88 dollars per barrel (159 liters) respectively. This was due to considerations by major shipping companies regarding the resumption of transit through the Red Sea. Companies such as Hapag Lloyd, Maersk and CMA CGM had announced that they would avoid the Suez Canal for the time being following attacks on freighters by the Houthi militia from Yemen. Supply fears following the change in the shipping route, which is important for oil transportation, had recently driven prices up. The experts urged caution. "I think we'll have to wait and see if the recent increase in naval patrols leads to a reduction in attacks," said Callum Macpherson, manager at asset manager Investec.

Biopharma companies high on the agenda

Meanwhile, the London gold price benchmark reached a new all-time high. At 2069.40 dollars per troy ounce, the price of the yellow metal was at times higher than ever before, according to the London Bullion Market Association (LBMA). The previous record from August 2020 was reached at USD 2067.15. "I can think of no clearer evidence of gold's role as a store of value than the enthusiasm with which investors around the world have turned to the metal during the recent economic and geopolitical turmoil," said LBMA chief executive Ruth Crowell. The refinitive spot price for gold was 0.7 percent firmer at around 2081 dollars per troy ounce. It reached its most recent all-time high of 2135.40 dollars on December 4.

Among the individual stocks in demand were a number of shares in biopharmaceutical companies. The announcement of the sale of a drug for intestinal diseases caused the shares of First Wave Biopharma to shoot up by up to 300%. They then leveled off at a gain of around 50 percent. The success of a heart drug from Cytokinetics in a clinical trial helped the share price to rise by around 82 percent. The approval of a new drug delivery system from Coherusalso drovethe shares up by almost 24%.

Investors also bought into Bit Digital . The shares of the cryptocurrency miner climbed by a good 18 percent. The company wants to double its capacity and mine around six units of the important cyber currency Ethereum per second by 2024.