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NEW YORK (dpa-AFX) – On Tuesday, the US leading index Dow Jones Industrial (Dow Jones 30 Industrial) continued its recovery course, which was interrupted at the beginning of the week. Financial stocks were buoyed by the prospect of interest rate hikes by the central bank possibly being steeper than previously expected. In addition, pleasing business figures from the sports goods manufacturer Nike put everyone in a good mood. In addition, investors were relieved to learn that oil prices did not continue their recent strong rise for the time being.
The Dow rose in early trading by 0.83 percent to 34,838.49 points and is thus approaching the 35,000 point mark last exceeded in mid-February. The broader S&P 500 was up 0.90 percent to 4501.38 points and the tech-heavy NASDAQ 100 index index gained 1.37 percent to 14,572.59 points.
The day before, central bank chief Jerome Powell had already brought up the possibility of faster interest rate hikes in view of the “much too high” rate of inflation. The Fed could also raise interest rates by more than 0.25 percentage points at upcoming meetings of the central bank if necessary. However, Powell’s statements only caused uncertainty for a short time and were interpreted positively on Tuesday.
“Confidence in the Fed still prevails among equity investors,” said fund manager Thomas Altmann from asset manager QC Partners. Everyone here assumed that the Fed would only raise the key interest rate so much that it would not harm the economy.
Analyst Jeffrey Halley from broker Oanda warned against being too careless. In addition to the interest rate hikes, he refers to the Fed’s considerations of reducing the balance sheet, which has been swollen by the Corona aid programs, which would roughly correspond to a further interest rate hike. This raises the question of whether the Fed’s growth forecasts for the economy in this environment are correct. The abrupt switch from loose to tight monetary policy while the Ukraine war is sending another costly wave of inflation across the world does not inspire confidence. At the same time, an end to the war is not in sight.
At the top of the Dow, shares of Nike soared about five percent. The Group accelerated its revenue growth in the third fiscal quarter. Analysts reacted with higher price targets. Expert Kate McShane from the bank Goldman Sachs praised the China business in particular, which had unexpectedly improved compared to the previous quarter.
Among financials, Goldman Sachs stock rose nearly two percent and JPMorgan (JPMorgan ChaseCo) stock rose nearly three percent. Higher interest rates would strengthen the earning power of the big banks.
The shares of the Chinese Internet giant Alibaba, which are listed in New York, even went up by a good 12 percent after the latter had announced further share buybacks worth billions.
The shares of the English football club Manchester United benefited from a buy recommendation by Deutsche Bank with a plus of more than one percent to almost 14 US dollars. Analyst Connor Murphy sees significant upside potential up to $18. The stock valuation, which is low compared to the industry, is not appropriate. Manchester United is one of the world’s best-known and most valuable sports franchises./la/jha/