Status: 11/23/2022 4:55 PM
Uncertainty about the future interest rate of the US Federal Reserve continues to keep investors wary. Wall Street is also eagerly awaiting new data.
Investors have a similar view today as they have all week. The DAX is almost unchanged at the 14,400 mark at a high level, while investors await a fresh push. This data could be released from the US later this evening when the minutes of the Federal Reserve (Fed) interest rate meeting are released.
“Often it’s not the content of the minutes, but the subtle changes that get investors excited,” says Craig Orlam of the Orlando brokerage. In general, the US Federal Reserve expects a slower pace on the stock exchanges. “However, interest rates are likely to be raised further in order to continue to fight inflation,” said market analyst Christian Henke of brokerage IG.
Wall Street rallied a bit initially
Investors in New York are eagerly awaiting the Fed’s meeting minutes. Plus, there’s a long weekend: On Thursday, US commerce will pause for the Thanksgiving holiday. Many investors use this and the ensuing “Black Friday” as a long break.
Meanwhile, the stock market is building on the recovery from the previous day at the start of the business and continues to move higher. The leading Dow Jones advanced about 0.3 percent, and the tech-heavy Nasdaq advanced about 0.8 percent.
a day ago The Dow crossed the 34,000-point mark for the first time in three months. With this up around 19 percent since mid-October, investors have been betting that the Fed may pick up its fast pace of tightening somewhat at its next rate meeting in mid-December. One market observer said, “The risk to the markets is that the monetary authorities may be less restrictive than expected.” This may lead to a reassessment of the effects of future interest rate increases again.
US industry with increasing demand
Meanwhile, the stock market has to process a whole host of other US economic data. The industry received a surprising number of orders in October. The Commerce Department said orders for durable goods such as aircraft and machinery grew 1.0 percent month over month, today in Washington. Experts had expected an increase of just 0.4 percent after an increase of 0.3 percent in September.
“This is a sign of continued investment activity by companies,” said Helaba economist Ralfsirkull, commenting on the continued upward trend. “Apart from the deterioration in sentiment that has also been seen in the manufacturing sector in recent months, the industry appears to be continuing to grow.”
Unexpected number of initial applications
The situation in the US labor market unexpectedly deteriorated significantly over the past week. The Labor Department said the number of initial jobless claims rose by 17,000 to 240,000. Analysts expected only 225,000 applications, down from 223,000 applications in the previous week. Because of the Thanksgiving holiday on Thursday, the data was released a day earlier than usual.
The German economy has stopped sliding
Encouraging data came out of the German economy in the morning. The private sector PMI – manufacturing and services combined – rose 1.3 to 46.4 points. This was announced by the financial services provider S&P Global. However, the measure, which has garnered a lot of attention in the financial markets, has remained below the 50 level for the fifth month in a row, and from this point on it indicates growth.
The Euro is still in a bullish mode
The possibility of a tightening of the interest rate differential between the dollar and the euro helps the common currency return to parity with the dollar. In the afternoon session, the Euro extended its gains to trade at $1.0365.
Oil price stability
The price of oil came under significant pressure in the afternoon. According to experts, China’s handling of the current Corona wave is crucial at the present time for the development of prices in the oil market. After increasing numbers of new infections and deaths, the political leadership has tightened its already stringent pace in some major cities. The result is constant pressure on the economy and the demand for oil.
According to an EU diplomat, the planned cap on Russian oil prices for the G7 could be in the range of $65 to $70 per barrel. According to stockbrokers, this would put the upper bound above the current price level. Russian oil is sold at a significant discount to the world market price.
Siemens Energy is featured in the DAX
The energy subsidiary of the Siemens Group, Siemens Energy, leads the DAX by around 2.5 percent. On the other hand, investors are avoiding Siemens Healthineers after the downgrade. Medical Technology Group shares fell to the bottom of the index, with prices down about 3.0 percent. Jefferies analysts put the stock on hold from an earlier buyout. In light of staff shortages and rising financing and construction costs, experts at the investment bank have been cautious about order growth in the coming year.
Collective bargaining agreement at VW
Volkswagen shares extend losses. According to Volkswagen, after more than 16 hours of “intensive negotiations”, early Wednesday morning Reach a collective bargaining agreement over the internal tariff. The IG Metall union and the Wolfsburg-based automaker have agreed two-step increases in income of 8.5% and a net one-time payment of €3,000 over two years.
Valneva copes with vaccine failure
According to a media report, the French-Austrian biotechnology group Valneva expects manageable financial consequences despite the insignificant demand for the inactivated Corona vaccine. The exact costs are still open, CEO Thomas Lengelbach told the Austrian news agency APA, “but it’s probably less than 20 percent of all the expenses we’ve had in connection with Covid.” In addition, it remains unclear whether Valneva will eventually exit Covid vaccine development with red or black numbers. In any case, there will be no financial problems.
SFC has made a major request
After the largest fuel cell order in the company’s history, stakes in SFC Energy increased significantly. The strategic follow-up order from LiveView Technologies USA underscores the high demand for fuel cells and forms the basis for a future US presence, according to the company.
Manchester United stake a pawn?
The British football club’s stake increases by about 11% in the London dealings. The owners of Manchester United in the United States are considering selling the English Premier League club. As announced by the association, the Glazer family is considering external financing to boost growth. “As part of this process, the board will consider any strategic alternatives, including new investments in the club, sale or other transaction affecting the company.” This announcement came about four hours after the announcement of the termination of the contract of Manchester United and soccer star Cristiano Ronaldo.
Credit Suisse shareholders agree to the capital increase
Shareholders of the crisis-torn Swiss bank agreed to raise capital. At an extraordinary general meeting, more than 90 percent voted in favor of the administration’s plans, Credit Suisse announced. Among others, the Saudi National Bank acquired from Saudi Arabia a stake of about 9.9 percent. There is an offer of additional purchases for existing shareholders. Overall, the new shares are expected to bring four billion francs to the treasury. With this rescue plan, the bank wants to get out of the crisis after billions in losses.
HP is also planning mass layoffs
American computer maker HP wants to cut about 4,000 to 6,000 jobs worldwide by the end of the 2025 fiscal year. The company said last night that other costs and expenses of about $1 billion are likely to be incurred for the restructuring. For the fourth quarter, HP reported a sales decline of 11%, to $14.8 billion. Previously, other companies in the technology industry, such as Amazon and Meta, have announced plans to lay off employees due to the potential economic downturn.