Börse Express – New York shares Outlook: A little weaker on the Fed day after a strong previous day

NEW YORK (dpa-AFX) – On the day of the key interest rate decision in the USA, the New York stock markets are expected to be somewhat weaker. The broker IG appraised the leading index Dow Jones Industrial
a good three-quarters of an hour before the opening, 0.38 percent lower to 33,956 points. The highly tech-heavy Nasdaq 100
is only expected to be slightly negative. The day before, the indices had partly made up for their losses at the start of the week with a strong finale.

In the evening, the focus will be on the interest rate decision by the US Federal Reserve, which is expected to slow down the rate hikes again. On average, economists expect central bankers to raise interest rates by just 0.25 percentage points. The interest margin should thus rise to 4.50 to 4.75 percent. Investors are awaiting clues as to how the Fed will proceed as the year progresses.

In December, the central bank had increased the key interest rate by 0.50 points. Before that, it had made four exceptionally large rate hikes of 0.75 points. With its interest rate hikes, the Fed wants to weaken economic momentum in order to bring inflation back to the two percent target. At the same time, rising interest rates are poison for the stock markets. Other asset classes will then become more attractive and companies will have to dig deeper into their pockets for their financing.

“There is increasing evidence that rate hikes have contributed to the slowdown in the economy, inflation and the job market,” said broker Oanda analyst Craig Erlam. “The question, however, is whether the Fed believes it has done so sufficiently, particularly with core inflation, which may prove more stubborn.”

Erlam’s assessment is supported by new data from the job market on Wednesday. Significantly fewer jobs were created in the private sector in the United States in January than expected. Compared to the previous month, 106,000 jobs were added, as announced by the labor market service provider ADP. Analysts had expected 180,000 new jobs. Shortly after the start of the stock exchange, sentiment data from the industry are still on the agenda.

In addition to the main interest rate decision, some companies with quarterly figures are in view in the middle of the week. The chip company AMD
For example, in a weak PC market, it benefited from strong business with data centers as well as the aviation and automotive industries. Growth in these areas more than offset the slump in personal computer processor business in the past quarter. The papers gained more than three percent before the market.

The photo app Snapchat is still gaining new users – but the advertising business is not taking off. After stagnating sales in the past quarter, the developer company Snap expects
internally for the current quarter with a drop in revenue of between two and ten percent. Investors missed Snap a pre-market lesson with minus 13.5 percent.

Investors in Electronic Arts also had to suffer significant losses of nine percent before the market opened accept after the video game manufacturer had disappointed with its outlook for the current quarter. The highly anticipated next Star Wars game has been delayed by a few weeks.

Biotech company Amgen suffered a slight setback in the fourth quarter. Profits fell by around 15 percent in the final quarter, and sales were practically stationary. Higher product revenues were offset by lower other revenues from the collaboration with the US pharmaceutical group Eli Lilly in the production of Covid antibodies. Premarket, Amgen posted sales of just over half a percent.

T-Mobile US fell by a good one and a half percent according to quarterly figures in pre-market US trading. Investors were probably disappointed by the Telekom subsidiary’s forecast for net contract customer growth. Analyst Philip Cusick of JPMorgan described the final quarter as solid./ajx/mis

 ISIN  US2605661048  US6311011026  US78378X1072

AXC0199 2023-02-01/14:59

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