NEW YORK (Dow Jones)–Investors on Wall Street are in a buying mood Tuesday. In trade, reference is made to lower-than-expected US inflation data. Market players are therefore seeing further evidence that inflation has peaked. Because inflation in the USA has been on the decline since the summer. The new consumer price data fit the picture. Falling inflation is raising hopes among investors that the Federal Reserve’s zeal for monetary tightening is fading. Because the data reduces the pressure on the US Federal Reserve to further aggressively raise interest rates.
The Fed will announce the outcome of its current interest rate meeting on Wednesday. One rate hike by 50 basis points is considered agreed. The accompanying statements by the central bank and the subsequent press conference by Fed Chairman Jerome Powell should be exciting. The question here is whether the Fed is taking the latest data as an opportunity to signal a less tight interest rate path. The uncertainty about this is causing prices to bounce back from their highs in the course of the initial excitement.
Around noon (New York local time), the Dow Jones index was still 0.3 percent higher at 34,093 points, while the S&P 500 and Nasdaq Composite rose by 0.8 and 1.3 percent, respectively. Plunging market interest rates are fueling the technology-heavy Nasdaq in particular. “I’m pleasantly surprised, we have lower inflation and lower core inflation,” said investment strategist Fahad Kamal from Kleinwort Hambros, summarizing the euphoria on the market. Market strategist Jim Reid of Deutsche Bank reminds us that the best and worst day of the year for the S&P 500 so far has been a consumer price day.
Dollar and yields under pressure
The dollar is coming under pressure with the prospect of less significant interest rate increases, the dollar index is losing 1.2 percent – the euro is increasing accordingly. The buying mood is higher on the bond market than with shares, and yields are falling. Falling market interest rates and the weak dollar are fueling the price of gold.
Oil prices continue to expand recent premiums – fueled by demand speculation in the wake of US inflation data. Because lower interest rates increase the likelihood of a soft landing for the US economy without a recession. In trade, however, reference is also made to the decommissioning of an important pipeline in North America. The operator of the Keystone pump line, TC Energy, still cannot give a date when the discovered leak will be repaired and the pipeline can be restarted. The pump line delivers Canadian oil to the US Gulf Coast – and also to the oil hub in Cushing, where the prices for US light oil of the WTI variety are set.
Oracle and Moderna are driving positive headlines
Among individual stocks, Oracle are up 1.2 percent. The software group has implemented and earned more than expected in its second quarter. The US pharmaceutical company Moderna (+24%) reports positive study results in the development of a cancer vaccine based on mRNA biotechnology in connection with a drug from Merck (+1.1%).
The aircraft manufacturer Boeing has again received a major order. The airline United Airlines wants to buy 100 examples of the long-haul airliner 787 Dreamliner. There is an option for 100 more machines. The price had already been boosted the day before by reports from circles about a major order from Air India, and now the titles have risen by a further 1.0 percent.
Raytheon advance 1.2 percent. The board of the aerospace and defense technology company has approved a new share buyback program of up to $6 billion. Joann Inc stock is down 8.6 percent. The arts and crafts retailer released third-quarter results that showed a 7.9 percent decline in net sales from a year earlier. A loss was also recorded.
Trimble lost 5.6 percent. The company has agreed to acquire Transporeon, a German cloud-based logistics platform, in a €1.88 billion cash transaction.
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INDEX last +/-% absolute +/-% YTD
DJIA 34,092.51 +0.3% 87.47 -6.2%
S&P 500 4,024.26 +0.8% 33.70 -15.6%
Nasdaq Comp. 11,283.06 +1.3% 139.32 -27.9%
Nasdaq-100 11,865.17 +1.4% 158.73 -27.3%
US Bonds
Term Yield Bp to VT Yield VT +/-Bp YTD
2 years 4.20 -18.9 4.39 347.2
5 years 3.64 -14.7 3.79 238.2
7 years 3.58 -14.9 3.73 213.7
10 years 3.48 -12.8 3.61 197.5
30 years 3.50 -7.2 3.57 160.2
FOREX last +/- % Tue, 8:14 Mon, 17:31 % YTD
EUR/USD 1.0628 +0.9% 1.0558 1.0530 -6.5%
EUR/JPY 143.70 -0.9% 145.34 144.76 +9.8%
EUR/CHF 0.9851 -0.1% 0.9871 1.0680 -5.1%
EUR/GBP 0.8592 +0.0% 0.8589 0.8585 +2.3%
USD/JPY 135.21 -1.6% 137.65 137.52 +17.5%
GBP/USD 1.2369 +0.8% 1.2293 1.2261 -8.6%
USD/CNH (Offshore) 6.9656 -0.3% 6.9835 6.9929 +9.6%
Bitcoin
BTC/USD 17,760.60 +3.5% 17,214.65 17,005.42 -61.6%
CRUDE OIL last VT settlem. +/- % +/- USD % YTD
WTI/Nymex 75.98 73.17 +3.8% +2.81 +9.7%
Brent/ICE 81.12 77.99 +4.0% +3.13 +12.0%
GAS VT Settlem. +/- EUR
Dutch TTF 137.90 136.59 +1.0% +1.31 +106.7%
METALS last day before +/- % +/- USD % YTD
Gold (Spot) 1,808.02 1,781.23 +1.5% +26.79 -1.2%
Silver (Spot) 23.65 23.50 +0.7% +0.15 +1.5%
Platinum (Spot) 1,032.55 1,001.00 +3.2% +31.55 +6.4%
Copper Future 3.89 3.80 +2.5% +0.09 -11.7%
YTD relative to previous day’s close
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(END) Dow Jones Newswires
December 13, 2022 12:14 PM ET (17:14 GMT)
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