Wall Street mixed after inflation numbers

Wall Street mixed after inflation numbers

This is how it ended for the leading stock indices on Thursday:

  • The Dow Jones Industrial Average, which consists of 30 carefully selected stocks believed to be important, rose 1.47 percent.
  • The Nasdaq Composite Index, which is dominated by technology companies, fell 0.23 percent
  • The Standard & Poor’s 500 collective index, which includes 500 of the largest listed companies, rose 0.38 percent.

The interest rate on ten-year US government debt rose slightly to 4.34 percent, compared to 4.27 percent on Wednesday. In mid-October, the interest rate peaked at five percent, but since then it has been on a downward trend.

Lower interest rates have given a boost to the stock market, which is now on track for a fifth straight week of gains. In November, the S&P 500 rose more than eight percent, while the Nasdaq rose about ten percent.

Inflation lower than expected

An hour before the opening of trading, the monthly Personal Consumption Expenditures price index was released from the US General Statistical Authority.

In October, core inflation, adjusted for food and fuel, rose 3.5 percent compared to the same month the previous year. Overall inflation was steady at three percent.

The Personal Consumption Expenditures Index is the US Federal Reserve’s preferred measure of inflation. The central bank sets a long-term inflation target of 2%. The constant trickle of numbers and statistics indicates that inflation is on its way down toward the target.

In the interest rate market, there is a close to 100 percent probability that the central bank will finish raising interest rates. At the same time, the market believes in interest rate cuts already in the spring.

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The price of oil is falling

On Thursday, a chaotic OPEC meeting was scheduled, with accompanying fluctuations in oil prices. After much tossing and turning, one finally arrived press release From OPEC+, which states that a number of countries have announced voluntary reductions in their quotas totaling 2.2 million barrels per day.

Saudi Arabia will extend the voluntary cuts of one million barrels per day during the first quarter, while Russia will increase the cuts from 300,000 to 500,000 barrels. At the top, there will be smaller discounts from the UAE, Kuwait, Kazakhstan, Algeria and Oman from the beginning of the year until the end of March.

Earlier on Thursday, the price of oil rose above $84, but around 16.30 it began a sharp decline that did not stop until $80.5.

Rob Haworth, an asset management strategist at the US bank, points out to Bloomberg that OPEC countries have not always followed through on the planned cuts, and that the market doubts the actual outcome.

Robbie Fraser, an analyst at Schneider Electric, notes that Saudi Arabia was concerned that smaller countries should also contribute. Fraser points out that this may be an indication that Saudi Arabia will not bear the burden alone, while US oil production has reached record levels and is still increasing.

Saudi Arabia currently produces nine million barrels per day out of its total production capacity of 12 million barrels, which many believe is actually closer to 11 million.

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Last week, OPEC+ postponed the meeting, causing a noticeable decline in oil prices amid speculation of disagreements between member states. It later emerged that Nigeria and Angola opposed the cuts.

On Thursday, OPEC+ also announced that Brazil, South America’s largest oil producer, would become a member of the oil cartel in the new year.(conditions)Copyright Dagens Næringsliv AS and/or our suppliers. We would like you to share our cases using links that lead directly to our pages. No copying or other use of all or part of the Content may be permitted except with written permission or as permitted by law. For more terms see here.

Dalila Awolowo

Dalila Awolowo

"Explorer. Unapologetic entrepreneur. Alcohol fanatic. Certified writer. Wannabe tv evangelist. Twitter fanatic. Student. Web scholar. Travel buff."

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