NEW YORK (awp international) – The New York stock exchanges are threatened with price losses on Monday after the previous week’s mixed results. Just under an hour before trading began, the broker IG estimated the leading index Dow Jones Industrial 0.4 percent lower to 42,186 points. IG sees the technology-heavy Nasdaq 100 down 0.5 percent at 19,934 points.
On Friday, both indices rewarded a strong US labor market report with gains, putting them in positive territory for the week. The data had put a severe damper on expectations of another “big” interest rate cut by the US Federal Reserve Bank of 0.5 percentage points at the beginning of November. However, hopes have increased that the world’s largest economy will avoid slipping into recession and achieve a “soft landing”.
Investors are now waiting for further economic data, which will be available in the coming days. In particular, consumer and producer prices for September on Thursday and Friday are likely to have a significant impact on the extent and timing of further Fed interest rate cuts. The quarterly reporting season for companies is also picking up speed on Friday with figures from the banks JPMorgan and Wells Fargo as well as the investment giant Blackrock.
Stock strategist Marija Veitmane from State Street Global Markets continues to see good prospects for stocks given the resilient economy and recently declining inflation. However, investors should not rely too much on a number of further significant interest rate cuts as price drivers, she pointed out.
This Monday the focus is on a possible purchase of the lithium producer Arcadium Lithium by the mining company Rio Tinto. Both companies said Rio had made a non-binding takeover offer to Arcadium. It is still unclear whether Rio Tinto will continue to pursue the project or whether both parties will come to an agreement. There were no financial details. The shares of Arcadium Lithium listed in New York jumped by a good third in the premarket, while the Rio shares in London were just in the red.
According to analyst Kaan Peker from the Canadian bank RBC, Rio could leverage operational synergies and increase production growth with an acquisition. JPMorgan expert Dominic O’Kane recalled that before the Rio plans were announced, the market capitalization of Arcadium Lithium was around 60 percent below the level at the beginning of the year.
The fact that Chevron sold its shares in some oil sands and shale assets in Canada to Canadian Natural Resources for $6.5 billion left the US oil company’s shares largely unaffected. With a plus of 0.7 percent, they increased premarket, similar to that of competitors ExxonMobil and ConocoPhillips. In the context of the planned concentration on important growth projects in the USA and the Gulf of Mexico, the step makes sense, emphasized RBC analyst Biraj Borkhataria. However, the uncertainty surrounding the takeover of Hess remains crucial for the share price. Meanwhile, Canadian Natural shares listed in New York rose by 2 percent.
Pfizer shares rose in price by 2.6 percent even before trading began. The Bloomberg news agency reported, citing insiders, that the hedge fund Starboard Value had invested in the pharmaceutical company with around one billion US dollars and wanted to bring about a turnaround at the pharmaceutical company./gl/mis
