Wall Street takes a breather after rally
After the recent rally, US investors on Wall Street continue to bet on an end to interest rate hikes. The Dow Jones index of blue chips closed the evening 0.1 percent higher at 34,095 points. The technology-heavy Nasdaq advanced 0.3 percent to 13,518 points. The broad-based S&P 500 gained 0.2 percent to 4365 points.
US investors were eagerly awaiting a series of comments from decision-makers over the course of the week in order to draw further conclusions about the future course of the Fed. A cooling US labor market last week had fueled speculation of an end to interest rate hikes and gave the major Wall Street indices their best weekly performance in around a year. "The US payrolls report was just right for the markets - weak enough to indicate that the Fed should stop raising rates, but not so weak as to set off alarm bells for the economy," said Mohit Kumar, chief European economist at Jefferies.
Meanwhile, the run on bonds slowed, while the yield on the ten-year benchmark government bond rose to as much as 4.654 percent from 4.558 percent previously. Even if the inflation outlook allows for interest rate cuts next year, caution is still required, warned Samy Chaar, chief economist at Lombard Odier. "Ten-year bond yields should eventually fall back to four percent," said Thierry Wizman, global currency and interest rate strategist at Macquarie, with conviction. "We have seen the peak in yields."
WeWork trading suspended
Among individual stocks, Tesla shares initially rose by up to around three percent after the Reuters agency reported on the planned construction of a new entry-level model in Germany. According to an insider, the US electric car pioneer is planning to produce an e-car for its factory near Berlin that will cost 25,000 euros. Tesla boss Elon Musk visited the factory last Friday and informed about the plans on this occasion. The electric car manufacturer has been aiming for a low-cost model for a long time, but put its plans on hold last year due to unsolvable technical issues. In the end, however, Tesla shares fell 0.3 percent.
Meanwhile, the New York Stock Exchange (NYSE) suspended the shares of office rental company WeWork from trading. The company was said to be awaiting news. Last week it was reported that WeWork was planning to file for bankruptcy in New Jersey this week in order to get its debts under control. The start-up, which was once valued at 47 billion dollars and is backed by Japanese tech investor SoftBank, is now only worth 44 million dollars on the stock exchange. WeWork has never been in the black.
Meanwhile, a surprising quarterly loss at Dish Network caused the pay-TV provider's shares to plummet by more than 37 percent. In the face of tough competition from streaming services, pay-TV subscriptions fell more sharply than expected. In addition, company boss Erik Carlson is reportedly stepping down as part of a planned merger with satellite operator EchoStar.
Following the positive market sentiment, many US investors in New York are actively participating in share trading on Wall Street, hoping for an end to interest rate hikes. The anticipated comments from decision-makers throughout the week could further influence the future course of the Federal Reserve.
Amidst these market activities, the trading of WeWork shares on the New York Stock Exchange was temporarily suspended, creating a buzz in the New York financial scene.
Source: www.ntv.de
