NEW YORK Market participants are apparently optimistic that the US Federal Reserve will not raise interest rates further on Wednesday, commented analyst Edward Moya from broker Oanda. After ten increases in a row, bank economists are now also expecting a monetary policy pause due to the cooling economy and the trend towards falling inflation. Another rate hike is then expected for July. Since March 2022, the US monetary authorities have raised the key interest rate by a total of five percentage points to a range of 5.0 to 5.25 percent.
Higher interest rates are particularly problematic for technology companies, which tend to have higher borrowing needs than companies in more traditional industries due to their greater focus on growth. In addition, they often pay lower dividends or no dividends at all. That makes their stocks particularly unattractive when interest rates are high when compared to fixed-income securities like bonds.
US inflation data, which are important for the further course of the Fed, are already on the agenda for Tuesday. After their interest rate decision on Wednesday, the European Central Bank (ECB) will provide information on its future monetary policy the next day and the Bank of Japan on Friday.
The fact that the pharmaceutical giant Novartis wants to strengthen its kidney pipeline with the takeover of Chinook Therapeutics catapulted the shares of the US biotech company by around 58 percent to almost 38 US dollars on Monday. The Swiss estimate the value of the transaction at up to 3.5 billion dollars. This includes a cash payment of $40 per Chinook share (totalling $3.2 billion) and an eventual cash bonus of up to $4 per share upon achievement of certain development results. The Novartis shares closed in Zurich 0.7 percent up.
At Biogen, it was only enough for a 1.5 percent gain after more significant premarket gains. The Chinook industry colleague received the approval recommendation of the advisory board of the responsible US authority FDA for an Alzheimer’s drug.
The shares in the Chinese electric car manufacturers Nio and Xpeng, which are listed in New York, were in greater demand: thanks to significant price reductions and numerous pre-orders for a new model, they rose by 8.7 and 11.1 percent, respectively.
At the software group Oracle, the shareholders were able to look forward to a price increase of ultimately six percent to $116.43 even before the quarterly figures expected after the trading hours. The record hunt for shares continued. The run, which is strong even by industry standards, could continue if results continue to show stronger cloud growth than competitors Amazon and Microsoft, wrote JPMorgan analyst Mark Murphy. Oracle could also benefit from its status as a relatively safe haven in the technology sector. Murphy reiterated his “overweight” vote – with the target price being raised to $109, he is still below the current valuation.
Meanwhile, the titles of the self-listed technology exchange Nasdaq lost 11.8 percent. It announced that it would swallow the software provider Adenza for $10.5 billion in cash and its own shares. Adenza, under its Calypso and AxiomSL brands, provides programs for financial market firms to help them manage risk and ensure regulatory compliance. The seller is the software holding company Thoma Bravo.
The euro showed little movement and most recently cost $1.0760. The European Central Bank (ECB) had previously set the reference rate at 1.0765 (Friday: 1.0780) dollars and the dollar thus cost 0.9289 (0.9276) euros.
US Treasury bond prices rose moderately. The futures contract for ten-year bonds (T-Note Future) rose by 0.11 percent to 113.52 points. The return on the paper was 3.74 percent./gl/men
— By Gerold Löhle, dpa-AFX —
2023-06-12 20:36:31
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