NEW YORK (dpa-AFX) – The price drop on the previous day should be followed by a recovery on Wall Street on Wednesday. However, excessive upward swings are not to be expected at the start of the bad month of June, because concerns about the economy and inflation continue to smoulder despite the recent price recovery.
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The broker IG valued the Dow around three quarters of an hour before the start with a good 0.6 percent plus to 33,196 points. For the technology-heavy Nasdaq 100, half a percent plus to 12,706 points indicated.
The day before, the oil prices, which had risen sharply at times due to new EU sanctions, and the record high inflation in the euro zone had also weighed on Wall Street courses. In addition to the discussions about a possibly faster tightening of interest rates by the ECB, investors suddenly had doubts about the further course of action of the US central bank.
Statements by the Fed last week were seen as evidence that interest rates in the USA were only being raised gradually. Broker Oanda’s Jeffrey Halley spoke of market sentiment swinging, with bargain hunters increasingly desperate to find a cyclical bottom.
Against this background, data from the manufacturing sector and later the economic report (Beige Book) of the US Federal Reserve should attract attention, before another important indicator will follow on Friday with the US job market report. The Fed has hiked interest rates twice this year. This Wednesday, the US Federal Reserve will also begin to melt down its balance sheet, which was inflated by the purchase of securities, which were carried out to support the economy during the pandemic.
However, the strategists at Citigroup are now assuming that the headwind on the stock markets will not be over after the first difficult five months. The strategists see the risk of falling profit forecasts by companies as a further headwind for unsettled investors.
This Wednesday, however, investors also have positive reports to digest. Salesforce, for example, delighted investors with a higher profit forecast, although the software company is now forecasting lower sales for the year. Shares jumped more than 9 percent premarket.
The shares of the computer manufacturer Hewlett Packard should also be worth a look after the previous evening’s figures, which according to a dealer had been received positively. A positive outlook for the second quarter from Delta Airlines, which is now returning to pre-pandemic 2019 levels, could also provide confidence.
Shares from S&P Global, on the other hand, lost more than eight percent before the official start of trading. The financial services group has put its financial forecast on hold due to the deteriorating macroeconomic conditions – new targets are expected to be announced only with the figures for the second quarter. The disappointed investors also punished competitor Moody’s before the market, whose price fell by more than six percent./tav/mis
Source: dpa-AFX
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