The American Markets
The American markets closed the last trading day of the previous week on a high note, with both the S&P 500 and Nasdaq Composite experiencing their best trading week of the year. Investors are now turning their attention to Wednesday and the Federal Reserve’s interest rate decision. The Fed is expected to cut the benchmark rate by 25 basis points, but according to CMA’s Fedwatch tool, there is an equal probability of a 50 basis points rate cut. The S&P 500 rose by 0.5 percent, while the Nasdaq Composite strengthened by 0.7 percent. The Dow Jones Industrial Index also saw a 0.7 percent increase.
Commodities
Commodities traded in different directions on Friday. The price of oil declined as more investors began to speculate against the commodity. Leading oil analysts noted that the difference between those speculating on an increase in oil prices compared to those predicting a decrease is at an all-time low. This is unusual, as oil prices typically rise when the supply of oil is limited. The number of active oil rigs in the US increased from 483 to 488 last week. WTI oil fell by 0.2 dollars to a price of 68.7 dollars per barrel. Brent oil decreased by 0.3 dollars to a price of 71.7 dollars per barrel.
Metals
Most base metals saw increases in their prices. Aluminum saw the highest rise, climbing by 2.4 percent. Zinc added 1.2 percent, while tin lifted by 1.1 percent. Copper and lead advanced by 0.5 and 0.4 percent, respectively. Nickel fell by 1.0 percent. The price of gold increased by 23.6 dollars per ounce to 2,582.2 dollars per ounce.
Company Updates
Among individual companies on the American markets, software company Adobe was yesterday’s biggest loser. The stock fell by 8.5 percent after the company’s earnings forecast came in below expectations in conjunction with its quarterly report. Aircraft manufacturing company Boeing dropped by 3.7 percent after the company’s factory workers initiated a strike following a failed wage negotiation. The company’s CFO commented that it will be more challenging to reach production goals for the 737 and Max models due to the strike.
The ten-year US Treasury bond yield dropped by 2 basis points to 3.66 percent.
Global Markets
The Hong Kong market started Monday’s trading on a positive note, with the Hang Seng index up by 0.2 percent. Both the Japanese and Chinese markets are closed today.
Domestic Updates
On the home front, new price targets have been released this morning. Goldman Sachs raised the target price for EQT to 375 kronor (from 370) and reiterated a buy rating. Pareto Securities increased the target price for Assa Abloy to 340 kronor (from 330) and maintained a hold rating.
Macro Front
It is a quiet day on the macroeconomic front. Denmark will release the Producer Price Index at 08:00, followed by Switzerland releasing their Producer Price Index half an hour later.
Analysis
The performance of the American markets, commodities, metals, and individual companies provides valuable insights into the current state of the economy and investor sentiment. The Federal Reserve’s upcoming interest rate decision and the impact on various sectors such as oil and software highlight the interconnected nature of global markets. Understanding these trends can help investors make informed decisions about their portfolios and navigate the complexities of the financial landscape.