NEW YORK (awp international) – Wall Street is likely to start with moderate losses on Thursday, building on the already weaker previous day. The broker IG assessed the leading index Dow Jones Industrial around three quarters of an hour before the start of trading with a minus of 0.13 percent at 32867 points. The tech-heavy Nasdaq 100 was expected to be down 0.11 percent.
The initially positive pre-market indications for Wall Street had recently turned negative after the European Central Bank (ECB) announced its interest rate decision. As expected, the high inflation is forcing the central bankers in the euro zone to take countermeasures: the decision has been made to end net bond purchases on July 1, and next month there will be a first interest rate hike for the first time in eleven years. Another rate hike could follow in September.
However, the fact that the monetary watchdogs also raised their inflation forecasts sharply caught investors “on the wrong foot,” commented Thomas Altmann from asset manager QC Partners. “Very few expected such a significant upward adjustment.” This has already weighed on prices on Europe’s stock exchanges and, according to Altmann, caused a “sell-off” on the bond markets, where yields rose in return.
The ECB’s decision had been awaited with great nervousness and suspense by investors in advance, out of concern that the ECB could overshoot its target in the fight against inflation. In the US, all eyes are now on Friday’s inflation data and next week’s Federal Reserve Board meeting.
In the case of US individual stocks, Tesla papers should again be in view on Thursday. The shares of the electric car manufacturer rose in pre-market trading by a good two and a half percent after a buy recommendation from the Swiss bank UBS. Analyst Patrick Hummel sees a good entry opportunity for investors after the price setback. Tesla shares have lost around a third of their value this year. Now it is “time to be more willing to take risks,” the industry expert encouraged investors. Figures provided by the Chinese association PCA also showed that Tesla production in the country almost tripled in May compared to the previous month.
Meanwhile, shares of Walgreens Boots Alliance came under some premarket pressure. Apparently, investors were not convinced by the offer that, according to the Bloomberg news agency, the pharmacy giant should have received from the financial investor Apollo and the Indian conglomerate Reliance for its international drugstore business with the British chain Boots. According to the report, Walgreens should have had a higher valuation in mind than the more than five billion pounds sterling (around 5.9 billion euros) offered – also some bidders are apparently on the verge of jumping because of different price expectations.
It could be turbulent after the course fireworks the day before for the papers of the Chinese Internet trading giant Alibaba. Here the hopes of an early IPO for the Alibaba holding Ant Group evaporated as quickly as they had come. This was preceded by reports that the Chinese financial regulators could give up their blocking stance. But it was followed by a denial from China’s stock exchange regulator. The day before, Alibaba shares on the Nasdaq technology exchange had gained almost 15 percent in the hope that Beijing’s regulatory stranglehold could loosen./tav/zb
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