NEW YORK (awp international) – New York stocks took off Wednesday despite further interest rate hikes planned by the US Federal Reserve. Major indexes slipped into the red following the Fed’s statements but ultimately remained above their daily lows.
The major Dow Jones Industrial index contained its loss at the end of trading at 33,966.35 points or 0.42%. The broader S&P 500 closed down 0.61% at 3995.32 points and the tech-heavy Nasdaq 100 fell 0.79% at 11,740.92 points.
At its December meeting, the Fed raised its key interest rate by only half a percentage point, as widely expected, thereby slowing the pace of rate hikes. Previously, it had raised the key interest rate four consecutive times by 0.75 percentage point. However, the monetary watchdogs apparently don’t intend to end their fight against inflation anytime soon. For 2023, they report even more interest rate hikes than before. Monetary policy will likely ease in the years to come. According to forecasts, however, there are signs of a higher level of interest rates than previously promised by central bankers.
Portfolio manager Thomas Altmann of QC Partners drew mixed conclusions from the Fed’s statements: “The Fed is slowing down. The days of huge hikes are over. The new pace is 50 basis points. That’s the good news,” emphasized the expert. “But: All those who were counting on a quick end to the current growth cycle today will be bitterly disappointed.” Corresponding hopes fueled a surprisingly significant easing in US inflation on Tuesday.
Among stocks on Wednesday, Moderna once again stood out as the leader of the Nasdaq 100, up 5.8% to $208.95. A day earlier, shares of the biotech company broke the $200 mark for the first time since mid-January on positive results from a study of a combination therapy of a cancer vaccine Moderna and Merck & Co’s cancer drug pembrolizumab. And like the day before, shares in Mainz competitor Biontech rose 4.4 percent on Moderna’s heels.
Meanwhile, yesterday’s Nasdaq Tesla taillight was once again not in demand with a minus of more than two and a half percent. Shares of the electric car maker are still at their lowest level in two years: In 2022 they have lost more than half of their value so far. Bernstein analyst Toni Sacconaghi argued in a study in late November that the stock is still highly valued relative to traditional automakers. The market value, which at its peak was about $1.3 trillion, has now dropped below $500 billion. At the same time, Germany’s top three automakers Volkswagen, Mercedes-Benz and BMW together make only the equivalent of $215 billion.
The red lantern in the high-tech selection index was picked up by Charter Communications mid-week with prices down more than 16%. The telecom group is investing more than expected in its networks and therefore probably has less money left over for share buybacks. JPMorgan analysts then scaled back their expectations for the company.
Cards from Delta Air Lines rose 2.8 percent on positive trade signals.
The euro quickly recovered from a period of weakness in response to comments from the Fed. In New York trading, the common currency was last seen at $1.0682, roughly equal to its previous level and remaining at its highest level in over six months. The European Central Bank (ECB) had set the reference rate at 1.0649 dollars.
US Treasuries eventually held up their modest gains. The futures contract for 10-year bonds (T-Note Future) rose 0.14% to 114.94 points. The yield on ten-year government bonds fell to 3.48 per cent/dl/men
— By Gerold Löhle, dpa-AFX —
