The New York Stock Exchange remains on positive ground after figures show that price growth is slowing down more than expected in the United States. A soft landing, according to the economics professor.
Photo: ANGELA WEISS / AFPPublished:
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This is what it looks like for the leading indices at 17:52 Norwegian time on Wednesday:
The broad S&P 500 index is up 0.66 per cent. The technology index Nasdaq Composite is up 0.73 per cent. The Dow Jones index is up 0.55 per cent.
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Professor of economics Betsy Stevenson at the University of Michigan tells CNBC that bringing the price level down requires patience.
– We see the number coming down. The US central bank must give the economy some time for the interest rate increases to work, says Stevenson.
The figures report also shows that the pressure on the labor market is decreasing.
– This is exactly what a soft landing looks like. The labor market is not crashing, but declining and the same tendency is seen with inflation, she adds.
At 20:00 Norwegian time, the economic report Beige Book from the American central bank Federal Reserve (Fed) arrives, where investors have the opportunity to look for signals about how the economy is developing.
June figures for the producer price index, another popularly watched inflation gauge, are expected on Thursday before the New York Stock Exchange opens.
Tesla rises 1.28 percent after Citigroup has increased its price target for the electric car manufacturer to $278 from the previous $215. So far in 2023, the Tesla share has risen by 119 percent.
Price growth and interest rate expectations down
Price inflation in the USA ended at three per cent in June, compared to the same month the previous year. This means that interest rate expectations in the market fall.
In advance, economists had believed that inflation would land at 3.1 percent, according to a survey of economists conducted by Bloomberg.
Core inflation, which excludes energy and food items, came in at 4.8 per cent. Five percent was expected.
– We particularly note that core inflation was clearly weaker than expected. Now the Fed will probably still raise interest rates in July. But the need for further tightening is dampened, says chief economist at Handelsbanken, Marius Gonsholt Hov to E24.
He further says that the probability of an interest rate hike after July should be considerably reduced. Ahead of the figures, it has been priced at about a 40 per cent probability of two further interest rate increases from the Fed this year. Now this probability has been reduced to 20 percent.
Microsoft wants to buy gaming giant
A federal judge on Tuesday rejected the Federal Trade Commission’s (FTC) attempt to block Microsoft’s roughly NOK 715 billion acquisition of video game giant Activision Blizzard.
Microsoft and Activision aim to finalize the deal by Tuesday, although the FTC may still appeal.
After the news came, Activision shares rose, and after a short time were up ten percent. The share also ended the day up ten percent.
The acquisition has been criticized from many quarters, and some have also expressed concern that a merger will lead to monopolies in the gambling market, including the American Competition Authority.
Activision Blizzard is behind games such as Call of Duty, World of Warcraft and Candy Crush.
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2023-07-12 13:30:33
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