NEW YORK (dpa-AFX) – Hopes for progress in the Ukraine conflict should support the US stock market at the start of the week. The broker IG appraised the Dow Jones Industrial around an hour before the start at 33,172 points and thus 0.69 percent above its Friday close. For the technology stock-heavy Nasdaq 100, there was a minus of 0.22 percent to 13,273 points. In the meantime, however, things had turned out much better.
Around two and a half weeks after Russia invaded Ukraine, new negotiations between the two states began on Monday. The fourth meeting in a larger group took place this time via video link. Most recently, the delegations met in person in Belarus. Discussions have already taken place in working groups over the past few days. So far, however, there has been no breakthrough.
Both sides exchanged positions, Ukrainian presidential adviser Mykhailo Podoliak wrote on Twitter at the start of the week. But communication is difficult.
In the past week, vague hopes of progress in the talks had repeatedly supported the US stock market, but in the end the Dow Jones was down around two percent for the week. Unlike on the German stock market, for example, fear of the economic consequences of the war on Wall Street has so far been limited in terms of prices.
At current premarket levels, the Dow Jones would be even higher than it was at the close on Feb. 23, the day before Russia invaded Ukraine. The US is much less dependent on Russian oil and gas than Europe, especially Germany.
In addition, the monetary policy of the US Federal Reserve is likely to play a role in investors’ considerations. In view of the high inflation, they had recently announced the turnaround in interest rates, i.e. a departure from their policy of ultra-cheap money. The first rate hike is therefore likely to be this Wednesday. As analyst Clemens Schmale from the stock market portal Godmode Trader explained in a recent study, market expectations regarding the level of interest rate hikes have recently fallen from 0.5 to 0.25 percentage points.
Since rising interest rates can weigh on stock valuations, a smaller rate hike than previously thought would be positive for prices. However, Schmale points out that war does not automatically lead to a monetary policy reaction.
In terms of individual values, the shares of the iPhone group Apple should be kept in mind on Monday. After the corona lockdown in Shenzhen, southern China, Apple partner Foxconn stopped production in the metropolis at its manufacturing facility, which also manufactures iPhones. Taiwanese parent company Hon Hai announced in Taipei on Monday that production lines at other factories are being adjusted to reduce the potential impact of the disruption. Apple’s iPhone sales could suffer as a result. The shares fell by a good one percent before the market./mis/stk
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