NEW YORK (awp international) – The US stock market is also likely to defy the economic strain caused by the war in Ukraine and the tightening of US monetary policy on Tuesday. The fact that the oil price rally has at least taken a break provides some relief. The broker IG assessed the Dow Jones Industrial around an hour before the start of trading at 34,684 points and thus around 0.38 percent above its previous day’s close. The technology-heavy selection index Nasdaq 100 is expected to remain unchanged at 14,380 points.
At the start of the week, Wall Street largely defied statements by US Federal Reserve Chairman Jerome Powell that interest rates might be tighter than previously expected. In view of the “much too high” inflation rate, Powell had brought up the possibility of faster increases in the key interest rate. The Fed could also hike interest rates by more than 0.25 percentage points at upcoming meetings of the Federal Reserve Board if needed.
“Confidence in the Fed still prevails among equity investors,” said fund manager Thomas Altmann from asset manager QC Partners. Here everyone 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 warns 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 as a result of 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 shift from loose to tight monetary policy as the Ukraine war sends 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.
On the corporate side, shares of Nike are up more than 5 percent in premarket US trade. The sporting goods maker accelerated its sales growth in the fiscal third quarter. Analysts responded with higher price targets. Kate McShane from the bank Goldman Sachs particularly praised the China business, which had unexpectedly improved compared to the second business quarter.
The shares of the Chinese Internet giant Alibaba, which are listed in New York, also went up significantly after it announced further share buybacks worth billions.
The shares of the English football club Manchester United could also be worth a look after a buy recommendation by Deutsche Bank. Analyst Connor Murphy sees significant price potential up to 18 US dollars. 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./mis/eas
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