NEW YORK (dpa-AFX) – The US stock exchanges are expected to start the new trading week on Monday on a friendly note. At the same time, investors should be cautious with equity investments, because nobody wants to be caught on the wrong foot on Tuesday when inflation data ran across the tickers, explained capital market strategist Jürgen Molnar from RoboMarkets.
After an inconsistent US stock market close on Friday, broker IG signaled an increase of 0.1 percent to 33,888 points for the Wall Street index Dow Jones Industrial (Dow Jones 30 Industrial) an hour before the start. He had gained half a percent on Friday and recorded a small minus on a weekly basis.
The tech-heavy NASDAQ 100 is expected to be up 0.5 percent at 12,365 on Monday after closing weaker on Friday. Technology stocks tend to be avoided more than other stocks during periods of rising interest rates, as their often high valuation is usually fueled by hopes of sizeable future gains. From today’s perspective, however, these are worth less with rising interest rates.
The US inflation data for January is considered to be the most important stock market event on the agenda this week. The US Federal Reserve’s assessment that a phase of falling inflation rates has begun is likely to be confirmed. “However, this time the forecast uncertainty is a little greater than usual,” put Commerzbank analyst Christoph Balz into perspective, referring to the newly composed basket, which is used to measure inflation. In addition, many suppliers were particularly happy to adjust their prices at the beginning of the year.
“Should inflation disappoint, speculation that key interest rates would rise significantly further would automatically receive new fuel,” warned portfolio manager Thomas Altmann from QC Partners.
Among the individual stocks, Citigroup could attract attention. According to the “Financial Times”, the sale of the Mexican subsidiary Banamex could possibly be pending soon. The major bank is conducting exclusive negotiations with the billionaire owner of Mexico’s largest mining group, Grupo Mexico, German Larrea, citing people familiar with the matter. The entrepreneur values Banamex at six to eight billion US dollars, which is significantly lower than analysts recently did. However, the stock hardly reacted before the market. It increased by 0.1 percent.
JPMorgan reinstated Walt Disney’s stock rating after quarterly results as “Overweight” with a $135 price target. The stock rose 0.3 percent premarket. The entertainment group exceeded expectations with strong results last week, wrote analyst Philip Cusick. While he is cautious on the media industry overall due to streaming losses and advertising headwinds, Disney is still his preferred holding. The reasons for this are the strong business portfolio and the sharp decline in streaming losses expected next year.
JetBlue Airways (JetBlue Airways) gained 0.6 percent before the start of trading. According to a report in the US daily “Politico”, the US Department of Justice plans to file an antitrust lawsuit in March to stop the acquisition of Spirit Airlines. In its article published shortly after the stock market closed on Friday, the newspaper refers to five people familiar with the matter. Spirit Airlines shares did not respond premarket.
Plunging oil prices sent Chevron, ConocoPhillips and ExxonMobil all down as much as 0.5 percent premarket. Market observers spoke of a countermovement in oil prices after they had risen significantly in the past week./ck/mis