Monday, 05/22/2023 22:23 from dpa-AFX
NEW YORK (dpa-AFX) – The most important US indices moved moderately in different directions on Monday. Investors continued to focus on the political dispute over raising the debt ceiling. An agreement is still not in sight. Recently, the Republican Chairman of the US House of Representatives, Kevin McCarthy, said that an agreement is possible this evening or on Tuesday, but an agreement this week is important.
The Dow ended trading down 0.42 percent at 33,286.58 points. The market-wide S&P 500 was almost unchanged with an increase of 0.02 percent to 4192.63 points after this much-noticed index had temporarily climbed to its highest level since last summer on Friday. The tech-heavy Nasdaq 100 was up 0.34 percent on Monday to 13849.74 points.
Republican negotiator McCarthy and US President Joe Biden are meeting at the White House shortly to discuss a budget deal to avert a default. At the beginning of June, without an agreement, a default is imminent, and that could not only damage the world’s largest economy, but also trigger a global financial crisis and an economic downturn.
Meanwhile, in view of the turbulence in the banking sector, Fed President Jerome Powell raised hopes that the Fed might not be able to raise key interest rates further in June for the time being. Neel Kashkari, president of the regional central bank of Minneapolis, expects a tight decision for or against an increase in June, as he told the US broadcaster CNBC. From his point of view, it is also important not to signal that the interest rate hike process is over. In the event of a break in June, an increase is possible as early as July, he said.
Among the individual stocks, Micron’s shares, which brought up the rear in the Nasdaq selection index, lost 2.9 percent. China has reminded that the trade conflict with the USA could escalate again at any moment, wrote CMC market analyst Konstantin Oldenburger, pointing out that Micron products had not withstood a cyber security check by the Chinese authorities. Chinese companies have therefore been warned against buying these products. “The technology sector has long since become the central playing field for national security between the two largest economies,” said Oldenburger.
In the Dow, shares in the largest US bank JPMorgan fell by 0.8 percent. During an investor day, management expressed a little more optimism about the current year following the takeover of the collapsed First Republic Bank, but some in the market interpreted the new target for net interest income as “lower than expected”. In addition, the top management expects a lot of uncertainty in the coming months.
Nike lost 4.0 percent at the end of the Dow. Citigroup put the stock on “Downside 90-Day Catalyst Watch.” Analyst Paul Lejuez therefore expects a rather negative price development in the next three months. As he wrote in his study, the prospects for the sporting goods group in North America are currently characterized by the reduction in inventories and an economic slowdown.
Meta gained 1.1 percent and at times reached its highest level since February 2022 at just under USD 253.60. However, the Internet giant felt the harshness of European data protection rules more than before. Facebook’s parent company was fined a record €1.2 billion by Ireland’s DPC over Facebook’s involvement in mass surveillance by Anglo-American intelligence agencies.
Pfizer were favorites in the S&P 100, up 5.4 percent. An oral weight-loss drug (Danuglipron) from the US drugmaker could be just as effective and even faster than Danish competitor Novo Nordisk’s Ozempic injection. This was reported by the news channel CNBC, citing data from a phase II study.
The euro was trading at $1.0812 at the close on Wall Street. The European Central Bank had set the reference rate at 1.0822 (Friday: 1.0808) dollars. The dollar thus cost 0.9240 (0.9252) euros. There was also little movement on the US bond market. Most recently, the futures contract for ten-year government bonds (T-Note Future) lost 0.12 percent to 113.42 points. The return on ten-year paper was 3.72 percent./ck/men
— By Claudia Müller, dpa-AFX —
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2023-05-22 20:23:00
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