FRANKFURT/NEW YORK (Reuters) – Sentiment on Wall Street is improving ahead of much-anticipated inflation data.
The Dow Jones index of standard values and the broader S&P 500 were around one percent higher on Monday afternoon in New York at 34,186 and 4133 points. The index of the technology exchange Nasdaq was 1.5 percent higher at 11,894 points.
Above all, heavyweights such as Apple, Amazon and Microsoft were able to recover from recent losses with an increase of between 1.5 and 3.7 percent. That gave the Nasdaq a boost. Resurgent interest rate concerns had put growth companies under pressure last week. Investors are now looking forward to the US inflation data expected for Tuesday, which experts say will help determine the further interest rate policy of the US Federal Reserve.
If consumer price inflation continues to slow as expected, it would be excellent news for the stock market, said Konstantin Oldenburger, a market analyst at brokerage firm CMC Markets. However, if the downward trend were to be interrupted and the data showed a rise in the core rate again, the dam would probably break first. Experts polled by Reuters expect the inflation rate to fall to 6.2 percent in January from 6.5 percent in December.
ANTICIPATED DECLINE IN INFLATION AFFECTS GOLD
The expected decline in the inflation rate pushed the gold price into the red. The precious metal lost 0.7 percent to 1851 dollars per troy ounce. “Investors are positioning themselves in anticipation of what they think is a benign inflation report,” said investment strategist Sam Stovall of CFRA Research in New York. Easing inflationary pressures would trigger an uptrend in stock prices and, in turn, push gold prices lower.
Meanwhile, a 0.3 percent decline in the dollar index, which tracks rates against major currencies, supported oil prices. The drop boosted demand for oil because it makes it cheaper for investors outside the US. As a result, the prices for Brent crude oil and US light oil WTI turned positive, previously they had temporarily recorded a minus of 1.5 percent.
Meanwhile, government bonds ended up in the depots. The yield on the 10-year US Treasury note has declined 1.7 basis points to 3.726 percent since Friday.
FURTHER JOB CUTTING AT META INSPIRES FACEBOOK MOTHER
In the case of the individual stocks, Meta investors reacted happily to a report by the “Financial Times”, according to which the Facebook parent is planning further job cuts. The shares rose by almost three percent. In November, the US group had already laid off 11,000 people – or 13 percent of the workforce. At the beginning of February, the Facebook parent announced that it wanted to reduce its spending by five billion dollars in the current year.
Bed, Bath & Beyond shares also fell 12 percent after the Canadian division was declared bankrupt. As a result, 65 branches of the ailing US furniture store have to close.
(Report by Johann M Cherian and Nette Nöstlinger. If you have any questions, please contact our editorial team at [email protected])