2023-09-11 23:00:15
US stocks begin the week’s trading with increases…with eyes on inflation
US stocks began the week’s trading with strong gains for their main indices, with the Nasdaq index jumping more than 1%, while eyes remained fixed on inflation data, expected to be released on Wednesday and Thursday, at a time when fears were renewed about the continuation of the Federal Reserve’s tight monetary policies.
By the end of trading on Monday, the Nasdaq Index compensated for part of last week’s losses, rising by 1.14%, and the S&P 500 Index added two-thirds of a percentage point to its value, while the Dow Jones Industrial Average only rose by a quarter of a percentage point.
The stock of electric car manufacturer Tesla contributed the largest share to the rise in indicators, as it jumped 10%, after Morgan Stanley recommended buying the stock, anticipating a boom in its price, due to the innovations that have been achieved in the car’s self-driving application.
The stock of the XLK exchange-traded fund, which focuses its investments in modern technology companies, rose today, Monday, by 0.5%, compensating for part of its losses this month, which had exceeded 1% before the beginning of this week.
Despite the loss of the last two months, the favorite fund of millions of American stock investors is still up by nearly 40% during the period that passed this year.
This week, investors are looking forward to key inflation data, after a series of stronger-than-expected economic data last week, which renewed fears that the Federal Reserve will raise interest rates at its meeting on the twentieth of this month.
The latest CPI and Producer Price Index readings, respectively, will be announced on Wednesday and Thursday. Investors are hoping for lower readings, although there are expectations for them to rise, due to energy cost pressures. Apple will also display its latest products on Tuesday, and the company is expected to unveil its new, awaited, “iPhone 15” smartphone.
In Europe, European stocks ended trading on Monday with gains, supported by the rise in mining company shares due to the rise in prices of most basic metals, while investors await the release of inflation data in the United States and the European Central Bank’s decision regarding monetary policy this week.
The Stoxx 600 index of European stocks rose 0.3%, closing at the highest level in almost a week.
Mining company shares jumped 2.4% as prices of most basic metals rose, supported by expectations of increased demand from China, the world’s largest consumer of metals.
Positive inflation data and ongoing economic stimulus measures in Beijing have increased indicators indicating the stability of the second largest economy in the world.
US inflation data, due on Wednesday, may determine whether interest rates rise globally while the European Central Bank is widely expected to keep its key lending rate at 3.75% when it meets on Thursday.
In a related manner, the price of Brent crude oil standard stabilized largely at settlement, today, Monday, above the level of $90 per barrel, which it reached last week for the first time in ten months, after Saudi Arabia and Russia announced new cuts in their oil production.
Brent crude fell one cent to $90.64 a barrel upon settlement on Monday, while US West Texas Intermediate crude fell 22 cents to $87.29.
Riyadh and Moscow announced last week that they would extend voluntary supply cuts amounting to a combined 1.3 million barrels per day until the end of the year.
The supply cuts overshadowed ongoing concern about economic activity in China. US Deputy Treasury Secretary Wally Adeyemo said on Monday that the economic problems facing China are likely to have a greater domestic impact than on the United States.
A preliminary Archyde.com poll showed on Monday that US crude oil inventories are expected to fall for the fifth week by about two million barrels.
Crude oil supplies may be halted again due to the hurricane and floods in eastern Libya, which killed 2,000 people and caused the closure of four major oil export ports since Saturday, namely Ras Lanuf, Zueitina, Brega and Sidra.
Attention is also turning to the monthly reports of the International Energy Agency and the Organization of the Petroleum Exporting Countries (OPEC), scheduled to be issued this week.
Last month, the International Energy Agency reduced its oil demand growth forecast for 2024 to one million barrels per day, attributing its decision to the poor state of the macroeconomic situation.
Meanwhile, OPEC’s August report left demand growth forecasts at 2.25 million bpd unchanged.
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