NEW YORK (dpa-AFX) – After a short break, the stock market rally in the USA could continue at a moderate pace on Wednesday. The focus is on the labor market data from the private provider ADP. The official labor market report is due on Friday.
Around an hour before the start of trading, the broker IG valued the Dow Jones Industrial (Dow Jones 30 Industrial) 0.3 percent higher at 36,230 points. Last Friday, the Wall Street index closed above 36,000 points for the first time since January 2022. The record high is around 36,952 points. The Nasdaq-100 selection index, whose record high was almost 16,765 points in November 2021, is set to start 0.5 percent higher on Wednesday at 15,964 points.
The US private sector created significantly fewer jobs than expected in November. Compared to the previous month, employment increased by 103,000 jobs, according to the labor market service provider ADP. Analysts had expected an average of 130,000 new jobs. In the previous month, the increase in employment was a downwardly revised 106,000 jobs. Initially, 113,000 positions were identified. The weakening of the labor market should help the US Federal Reserve in its fight against inflation.
If Friday’s unemployment report also shows a decline in job growth or a further increase in the unemployment rate, it would be easier to justify rate cuts,” UBS Global Wealth Management strategists wrote. But they still warned that “markets have gone too far in pricing in a rapid series of rate cuts.” A first Interest rate cut is expected on the market as early as spring 2024. The latest data about a continued noticeable decline in inflation caused euphoria among investors and recently fueled the stock market rally that has been going on since the end of October.
Among the individual stocks, the oil company ExxonMobil and its medium-term goals are likely to be in focus. In addition to increasing results and cash inflows, the US group wants to invest significantly more money in share buybacks in the coming years. ExxonMobil continues to rely on fossil fuels: the production of oil and gas is to be expanded. The share rose by 0.5 percent premarket.
PayPal shares lost 1.4 percent premarket. Analyst Jason Kupferberg from Bank of America removed his buy recommendation for the payment service provider and cut his price target from $77 to $66. He expects a transition year. The new management must gain credibility in the market and at the same time sustainably improve sales figures, wrote Kupferberg.
Signet Jewelers (Signet Jewelers) gained 0.8 percent premarket. The day before, they had already gained almost 6 percent after the jewelry chain impressed with its quarterly results. Now analyst Paul Lejuez from Citigroup raised the shares from “Neutral” to “Buy” and raised the price target from $93 to $119. The jewelry recession is nearing its end, he wrote./ck/mis