NEW YORK (Dow Jones) – In the run-up to the US Federal Reserve’s interest rate decision, stocks on Wall Street are treading water. The Dow Jones Index rose by 0.1 percent to 33,071 points, the S&P 500 and Nasdaq Composite gained 0.1 and 0.3 percent, respectively. Falling yields are nevertheless pushing prices up; there were still signs of losses before the market. On the stock market, October brought the market-wide S&P 500 its third monthly loss in a row; the index lost 8.6 percent during this period. This means that the index has had its longest dry spell since March 2020. “Stocks have recovered in the last few sessions, but caution will once again spread on Wall Street before the interest rate decision,” says market strategist Susannah Streeter from Hargreaves Lansdown, explaining the little changed prices.
Bond prices, on the other hand, are rising and pushing US yields into the red. Bond prices are being fueled by weak labor market data. Employment in the private sector rose slightly less than expected in October, according to the labor market service provider ADP. Long-term yields fell particularly significantly after the Treasury published details of the quarterly reimbursement. The issuance volume announced for the coming week is now largely in line with expectations. Overall, the state wants to incur less debt than originally planned.
“It doesn’t normally get too much attention, but given the massive rise in interest rates in recent months, particularly since the last refinancing announcement, there is concern that any surprises could help drive long-term yields even higher “even if this risk is now priced in much better than it was in August,” says market strategist Jim Reid from Deutsche Bank.
The Fed’s stance is considered safe
The market sees far less potential for surprises in the interest rate decision, as the market is pricing in a 99.7 percent probability that the key interest rate corridor of 5.25 to 5.50 percent will be confirmed. Therefore, investor focus is on the statements of Fed Chairman Jerome Powell. Oil is rising but remains below recent highs.
The oil price remains an important sentiment indicator, as further escalation in the Middle East is likely to drive oil prices sharply higher. Prices are currently rising. With the crisis in the Middle East, a risk premium of probably $3 to $5 per barrel has already been priced into oil prices. Prices have fallen slightly in the past few days, so the supply situation does not appear to be tight at the moment. However, strategic inventories have fallen to their lowest level in several years, it is said.
The dollar extends its previous day’s gains ahead of the US Federal Reserve’s interest rate decision. The dollar index is currently increasing by 0.4 percent. Investors are betting on Powell’s hawkish statements.
Reporting season remains in view
Kraft Heinz earned less in the third quarter, but exceeded profit expectations thanks to price increases. The US food company is becoming more optimistic about its profit for the year as a whole. The price gains 2.2 percent.
The US chemical company Dupont de Nemours had less sales than expected in the third quarter and was also disappointed with its sales forecast – the share price lost 3.9 percent. Advanced Micro Devices rise 3.5 percent. The chip manufacturer presented surprisingly good figures for the third quarter.
Match Group is cheaper by 13.8 percent. A disappointing outlook is the reason for the price crash. WeWork is preparing to file for bankruptcy, according to a Wall Street Journal report. The application for Chapter 11 protection should be filed next week, according to the paper. The share falls by 48 percent. A weak outlook causes Estee Lauder to decline by 20.9 percent.
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INDEX last +/- % absolute +/- % YTD
DJIA 33,071.45 +0.1% 18.58 -0.2%
S&P 500 4,199.61 +0.1% 5.81 +9.4%
Nasdaq Comp. 12,885.15 +0.3% 33.91 +23.1%
Nasdaq-100 14,455.26 +0.3% 45.48 +32.1%
US bonds
Maturity Yield Bp to VT Yield VT +/-Bp YTD
2 years 5.07 -2.5 5.10 65.1
5 years 4.81 -4.1 4.85 81.1
7 years 4.88 -5.1 4.94 91.4
10 years 4.88 -5.5 4.93 99.7
30 years 5.01 -8.3 5.10 104.2
FOREX last +/- % Wed 8:07 am Tue 5:20 pm % YTD
EUR/USD 1.0524 -0.5% 1.0576 1.0568 -1.7%
EUR/JPY 159.27 -0.5% 159.97 160.00 +13.5%
EUR/CHF 0.9571 -0.6% 0.9609 0.9612 -3.3%
EUR/GBP 0.8698 -0.1% 0.8702 0.8708 -1.7%
USD/JPY 151.36 -0.0% 151.27 151.41 +15.4%
GBP/USD 1.2100 -0.4% 1.2134 1.2136 +0.0%
USD/CNH (Offshore) 7.3375 -0.0% 7.3370 7.3424 +5.9%
Bitcoin
BTC/USD 34,605.92 +0.0% 34,435.38 34,338.07 +108.5%
CRUDE OIL most recently VT-Settlem. +/-% +/- USD% YTD
WTI/Nymex 83.02 81.02 +2.5% +2.00 +7.4%
Brent/ICE 87.12 85.02 +2.5% +2.10 +6.7%
METALS last day previous +/- % +/- USD % YTD
Gold (spot) 1,982.53 1,984.16 -0.1% -1.63 +8.7%
Silver (spot) 22.73 22.85 -0.5% -0.12 -5.1%
Platinum (spot) 927.23 936.90 -1.0% -9.67 -13.2%
Copper future 3.66 3.65 +0.4% +0.02 -3.8%
YTD based on the previous day’s closing level
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(END) Dow Jones Newswires
November 01, 2023 09:50 ET (13:50 GMT)