NEW YORK (dpa-AFX) – The US stock markets recovered significantly on Tuesday after a weak start to the week. Investors not only had to classify a series of economic data and a flood of company figures. They are also still eagerly awaiting the interest rate decision by the US Federal Reserve on Wednesday.
After a slow start, the Dow Jones Industrial (Dow Jones 30 Industrial) gradually gained 0.65 percent to 33,937.14 points. In January, the New York leading index is heading for a plus of 2.4 percent. The market-wide S&P 500 rose 0.92 percent on Tuesday to 4,054.77 points, while the tech-heavy NASDAQ 100, which was particularly weak the previous day, rose 1.12 percent to 12,045.27 points. Monthly gains of 5.6 and around 10 percent are even emerging here.
However, a number of experts fear that the recovery rally after the weak previous year will soon come to an end. “There are early signs that the rate hike cycle is having an impact, not least on corporate outlooks,” said Richard Hunter, market researcher at Interactive Investor. There are increasingly cautious or even negative forecasts given the increasing pressure on growth. The Fed will decide on its key interest rate on Wednesday. It is expected to raise it by 0.25 percentage point, but in doing so will further slow the pace of rate hikes. Statements on future developments will be more important than the rate hike.
He’s observing a lot of caution in the market, which is hardly a surprise given the events ahead, wrote analyst Craig Erlam at brokerage Oanda. So far, the US corporate earnings season has not gone as well as hoped, and the forthcoming annual reports from some big names could add another dampening effect. The uncertainty about the economic development had also been a challenge before that. From the middle of the week, some tech giants will present their numbers with Meta (Meta Platforms (ex Facebook)), Amazon, Alphabet (Alphabet A (ex Google)) and Apple.
Millions in value adjustments on the rail segment ruined the final quarter for the construction machinery and commercial vehicle manufacturer Caterpillar, which has been spoiled by success. Higher costs and the weaker US dollar also had a negative impact. Adjusted earnings per share fell short of expectations despite an increase, so that the share lost a further 3.2 percent at the end of the Dow. Before the weekend, however, it had reached a record level.
The second biggest daily loser in the leading index was McDonald’s (McDonalds) with a minus of 1.7 percent. Despite higher prices, the quick-service restaurant chain posted strong growth at the end of the year and earned significantly more than a year ago. However, the profitability was disappointing.
In contrast, the papers of General Motors (GM) (General Motors) attracted almost eight percent. The carmaker has expressed caution about the current year and only expects profits to increase under good conditions. In 2022, the bottom line was that profits were already falling. However, the figures and outlook were better than analysts had expected. In the wake of GM, shares in rivals Ford (Ford Motor) and Stellantis gained 4.4 and 3.6 percent, respectively.
UPS (United Parcel Service) delighted investors with a price increase of four and a half percent. After a surprising decline in sales in the fourth quarter, the parcel service is preparing for lower revenues in the new year. The competitor of FedEx and Deutsche Post DHL (Deutsche Post) is more pessimistic than the average analyst. However, the most recently achieved adjusted earnings per share surprised positively. Rival FedEx was up 4.4 percent.
Shares in oil giant ExxonMobil rose 1.6 percent after a record year. The disappointment that the group – in contrast to its competitor Chevron last week – did not present any new plans for the distribution of profits to shareholders for the time being was therefore limited to pre-market trading.
However, the record year caused by the corona virus was of little use to the pharmaceutical company Pfizer, as the price stagnation showed. The tailwind from the pandemic is likely to ease off noticeably in the new year, which is why the company expects sales and profits to fall significantly.
The music streaming market leader Spotify owed the price jump of almost twelve percent to a high since September to the mark of 200 million subscribers, which was exceeded for the first time. Experts saw both the number of users and the margin above expectations. The loss, which was higher than in the previous year, did not bother investors./gl/jha/