This week, financial markets await new US inflation numbers on Tuesday, and a subsequent interest rate meeting the next day. On Monday, it seemed as if there was optimism in the financial markets and that overcame fear of what might come from the news later in the week. At the pre-trading stage, the three major indices in the US stock market were likely to be raised by up to half a percent.
The price rally consolidated throughout the trading day, and when the exchanges closed it looked like this:
- The broad S & P 500 index rose 0.9 percent.
- The Dow Jones Industrial Average rose 0.6 percent.
- The Nasdaq benchmark rose 1.5 percent.
While the S&P 500 is up 13 percent so far this year, the Nasdaq Composite is up 29 percent.
Strong rise for cruise lines
Among individual stocks, Tesla was likely to be lifted above 1 percent in pre-trading and that is where Monday’s price development began. The share price is now up about $100 a share since mid-April. On Friday, the price rose again by 4 percent, and Monday’s price hike of just over 2 percent was the twelfth in a row.
Technology stocks Apple and Nvidia also traded in significant volumes on Monday, but the price development was initially more cautious. Apple’s share price increased to 1.6 percent on the day, and Nvidia’s price rose from low to high by 1.8 percent. At the same time, Amazon rose just over 2.5 percent.
After trading closed, Oracle submitted a new financial report and strongly beat revenue forecasts. Although the stock was up six percent during the Nasdaq open, the price continued to climb in after-market trading.
On Monday, however, it was cruise lines that took the lead in New York, when Carnival and Norwegian Cruise Line were boosted significantly. Share of Carnival is up about 15 percent Monday at most, and for a long time is at the same level of trading as Tesla stock. Norwegian Cruise Line was raised at most by nearly 10 percent, before the hike fell to 7.3 percent. Royal Caribbean Cruises rate was raised 2.5%.
When measured by market capitalization, RCL is the largest of the three, and it is also the share that has seen the most solid price development in the past year. In the past 12 months, the price hike has been 105 percent.
Much of Monday’s price rally may have been due to positive recommendations from two major investment banks. Bank of America analyst Andrew DiDora raised price targets for the three cruise lines on Monday, and for Carnival, the stock was upgraded to a buy recommendation with a new $20 price target versus a previous $11.
— The cruise industry’s long-term bookings and strong demand today could make cruise lines less vulnerable to lower demand from leisure travelers than others in tourism may experience, DeDora wrote in a note that Bloomberg notes.
Analyst Matthew R. Boss at JP Morgan also raised its Carnival price target on Monday, but the chief settled for a price target of $16.
Monday’s strong price hike lifted Carnival stock to a price near $15.
Interest rate unchanged on Wednesday?
According to a Bloomberg review, there is now a near 30 percent chance of a 0.25 percentage point interest rate increase on Wednesday. This still means that there is a preponderance in the market that believes the interest rate will remain at the current level. At the same time, Bloomberg reported that hedge funds were short government bonds, indicating that parts of the financial industry are far from believing the central bank is done raising interest rates anytime soon.
It’s only been a month and a half since the Fed raised its interest rate by 0.25 percent, which means the key rate will now be in the range of 5.0-5.25 percentage points.(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 more terms see here.
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