January 28, 2023

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Sudden braking on Wall Street after the Fed’s new signals, but Tesla rose sharply

Last week on Wall Street ended in a crash. Monday seemed to follow suit for a long time, before new signals came from two major figures in the US Central Bank (“Fed”).

First, San Francisco Federal Reserve Chair Mary Daley said she expects interest rates to exceed five percent, Bloomberg writes. Then Atlanta colleague Raphael Bostick came on board and said something similar: Interest rates should go above five percent in the second quarter and stay there “for a long time,” according to the news agency.

Until then, all major indices were clearly up, and tek stocks were in the lead. The announcement triggered a sudden brake, and at close of trading it looked something like this:

  • The broad S&P 500 closed down nearly 0.1 percent.
  • The Dow Jones Industrial Average fell 0.3 percent
  • The Nasdaq Composite Technology Index rose 0.6 percent

Take the helm

Signals from the Fed are important In Handelsbanken’s morning report on Monday, chief economist Marius Hof wrote that interest rate expectations fell sharply on Friday, and that the market now expects the Fed to “only” raise interest rates by 25 percentage points eventually. of the month.

Investors are eagerly awaiting the new inflation figures due on Thursday of this week.

Technology stocks in particular are exposed to the level of interest rates. For a period on Monday, shares of giant companies in the stock market, such as Apple and Alphabet, owner of Google, rose nearly three percent, before the picture turned. Fest shares rose 0.4 and 0.7 percent.

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Tesla’s electric vehicle share had a terrible 2022, with a 65 percent drop, but it has fared better in the new year. Despite the signals from the Federal Reserve, the stock rose nearly six percent on Monday.

low wage growth

Last week ended with a broad rally on Wall Street. The three major indices rose more than 2 percent on Friday, however, leaving the Dow Jones and the S&P 500 having their best week since November 2022.

In other words, the labor market report was well received by investors. Investors cheered that wage growth came in less than expected in December.

On the other hand, job growth was stronger than expected. 223,000 new jobs were created in the US in December, compared to an expected 202,000. (Conditions)Copyright Dagens Næringsliv AS and/or our suppliers. We’d like you to share our statuses using links that lead directly to our pages. Reproduction or other use of all or part of the Content may be made only with written permission or as permitted by law. For additional terms look here.