Equities New York: Slight recovery after price slide at the end of the week | 05/02/22

NEW YORK (awp international) – On Wall Street, the most important indices have recovered somewhat from Friday’s slide. Positively received economic data on the mood in industry on Monday helped. The general mood among investors remains one of caution ahead of the US Federal Reserve’s interest rate decision on Wednesday.

After a nervous start to trading, the leading index Dow Jones Industrial rose by 0.26 percent to 33,061.32 points. The market-wide S&P 500 gained 0.30 percent to 4144.41 points. The technology-heavy and particularly volatile Nasdaq 100 was up 0.60 percent to 12,931.42 points.

When the Fed announces its monetary policy decisions on Wednesday, investors are currently expecting a 0.5 percentage point hike in the key interest rate. “But beyond that, investors are waiting for new insights into the additional steps to be taken to combat inflation,” say the experts at Privatbank Metzler, looking beyond the concrete decisions.

Economically, the corona lockdowns in China and the ongoing war in Ukraine remain major international concerns for investors. This is one of the reasons why fresh economic data from the USA was particularly in focus on Monday. The mood in US industry surprisingly deteriorated in April, as shown by the unexpected decline in the ISM Purchasing Managers’ Index for April. This barometer for US industry, which serves as a gauge for overall economic growth, is still well above the growth threshold of 50 points.

The conclusion of the analyst Ralf Runde from the Landesbank Hessen-Thüringen was rather positive: “The important, national mood barometer of the US industry is solid, although the expectations were clearly missed.” Since the index is still clearly in the expansion zone, the interest rate expectations regarding the Fed will probably not be shaken this week. However, it is questionable whether the interest rate fantasies that go beyond this will be pushed through again. “A whole series of sharp rate hikes is already priced in,” the expert continued.

Among the weakest stocks in the S&P 500, Moody’s shares fell almost four percent. The financial rating provider missed expectations with its profit in the first quarter and reduced the annual outlook.

In contrast, Activision Blizzard’s shares were among the biggest winners in the index with a plus of around three percent. Here it was pointed out that investor legend Warren Buffett now holds ten percent of the computer games group.

Buffett’s Berkshire Hathaway shares were down 0.6 percent. This only kept the operating profit constant at the start of the year due to larger burdens in parts of the insurance business. Increased claims for damages at primary insurer Geico weighed on the results in this area. In contrast, the reinsurance business, the rail freight company BNSF, as well as manufacturing companies and retail trade were doing better than a year ago./la/he

–