After Friday’s setbacks, Wall Street is starting the stock market week with fresh impetus. In view of inflation and interest rate worries, the premiums that were initially significant are melting away noticeably in the course of trading. Twitter papers are down after Elon Musk allegations against the company.
After the levies at the end of the week, the US stock markets closed slightly higher on Monday. Significantly higher profits at the beginning of trading were not maintained. The Dow Jones index closed almost unchanged at 32,914 points, the S
The trading environment continued to be very volatile. The strong US labor market report for May had recently fueled concerns about further increases in key interest rates. Yields on the bond market rose sharply again. Yields on 5- to 30-year paper were above the 3 percent mark. “The labor market remains tight and job growth is resilient, allowing the Federal Reserve to raise interest rates further,” said Jeffrey Roach, chief economist at LPL Financial. The US Federal Reserve is expected to hike rates by 50 basis points at both its June and July meetings. What it will do then in September isn’t certain yet, but Friday’s jobs report didn’t do much to change the minds of those on Wall Street who believe the Fed still has a lot of work to do to make a move to cool off an overheated economy.
The US economic data agenda was empty at the beginning of the week. Investors’ eyes are also already on the consumer prices for May, which will be published on Friday and should provide further information about the development of inflation.
In terms of individual values, the focus was on the Amazon share with the share split at a ratio of 1:20. The paper gained 2.0 percent to $ 124.79. This step, which has been announced for a long time, is now being implemented, so investors will each have 20 times as many Amazon shares in their portfolios as before. In after-hours trading on Friday, the title was still at $ 2,447.50.
Twitter lost 1.5 percent. Billionaire Elon Musk accused the company of failing to meet its commitments under the acquisition agreement. Musk sees himself as having the right to terminate the contract. Musk said Twitter refused to provide the necessary data to facilitate its own assessment of the number of spam and fake accounts on the social media platform.
Spirit Airlines rose 7.0 percent after Jetblue Airways (up 2.0%) raised its bid in a takeover bid for the US low-cost carrier. The new offer now includes a contractual penalty of $350 million if the takeover fails for antitrust reasons. The company also increased its cash offer to $31.50 per share, including a $1.50 dividend to be paid immediately if Spirit investors approve a Jetblue deal.
Pfizer ( 0.1%) plans to invest $120 million to expand a manufacturing facility in Michigan to support production of its Covid-19 pill Paxlovid.
Prices on the oil market were volatile. The price of a barrel of the WTI variety fell 0.4 percent, the Brent price was also 0.4 percent lighter. The fact that Saudi Aramco, the world’s largest oil producer, significantly increased its sales price for the East Asia region had a somewhat supportive effect at times. According to observers, this is likely to be based on the expectation that demand will continue to be robust.
Quotations on the bond market fell significantly. The 10-year yield climbed 9.5 basis points to 3.03 percent. It was thus above the 3 percent mark for the first time since mid-May. Market participants referred to the data on inflation developments due at the end of the week. Gold prices fell 0.5 percent. Demand for the interest-free precious metal was impacted by the rise in market interest rates.
The euro fell 0.2 percent. According to RBC currency experts, it should show strength before the ECB’s interest rate meeting on Thursday. The central bankers there are likely to signal an imminent rate hike in July, which will create demand for the euro in advance. The dollar index rose 0.2 percent.
