(ABM FN-Dow Jones) US stock markets headed slightly lower on Monday. After Friday’s record levels, the S&P 500 and Dow Jones indices fell 0.1 to 0.3 percent. The Nasdaq Technology Stock Exchange lost 0.3 percent.
“After record US equity levels on Friday, Wall Street opened lower on Monday ahead of key inflation data tomorrow and the start of the earnings season this weekend,” said Michael Hewson, market analyst at CMC Markets.
US consumer prices are expected to rise sharply in March compared to February, according to Howson. That wouldn’t be too surprising, Hewson said. It is also looking to retail sales on Thursday. These may have gotten a boost in March with the coronavirus tests sent to American households.
JPMorgan Chase Bank, Bank of America and Wells Fargo, among others, continue the quarterly numbers this week, along with companies such as Delta Air Lines, PepsiCo and UnitedHealth Group.
“All of these numbers should be consistent with Goldilocks’ scenario to justify current market rates,” said Brooks Chief Information Officer Macdonald’s Edward Park.
Despite the stock markets resting on Monday, fundamental sentiment over equities remains positive. According to market strategist Florent Buchon of Natixis, there are few short-term risks.
Bouchon says preference is given to valued stocks, given expectations that the macroeconomic picture will improve and inflation rise quickly. This could mean a “more aggressive” interest rate scenario, which is beneficial for this type of stock.
The economic recovery along with previously high inflation has led to interest rate concerns among investors. However, Hewson believes the Fed has managed market expectations for a rate hike so far, even after the very strong jobs report for March.
In a 60 Minutes interview, Federal Reserve Chairman Jerome Powell expressed his optimism about the US economy this weekend, but also assured, according to market analyst at AvaTrade, Naim Aslam, “2021 will not be a year of monetary policy changes.”
“We think we’ve reached the point where the economy is starting to grow faster and job growth is accelerating dramatically,” Powell said. The US economy is expected to generate more than 1 million jobs every month for several months at a time.
Powell only wants to consider raising interest rates if there is an employment cap and inflation has been above 2% for some time. “It will take some time before we get this in order,” said the banker.
The EUR / USD was trading slightly higher at 1.1916. According to market strategists at UniCredit, a lot of positive economic news has already been priced into the US and thus the dollar is unable to rally against the other major currencies.
“The barrier to further dollar strength is very high,” UniCredit said.
A barrel of WTI oil is now 0.5 percent at $ 59.63. Later this week, OPEC and the International Energy Agency will publish their monthly reports.
Alibaba was fined 18.2 billion yuan by Chinese competition authorities, or more than 2.3 billion euros. The fine, equivalent to 4 percent of the turnover in 2019, follows a months-long investigation. According to the State Administration of Market Supervision, Alibaba has been misusing its dominant market position in online retailing since 2015.
Alibaba shares rose 6.5 percent on Monday. Industry peers such as JD.com and Baidu slipped 2 to 3 percent.
Microsoft will acquire Nuance Communications for a total of $ 19.7 billion, including debt. The company confirmed this on Monday. The acquisition is Microsoft’s second largest acquisition ever. In 2016, LinkedIn was paid $ 27 billion. Microsoft’s share rose 0.5 percent. The value of small shares increased by 16.2 percent.
Beyond Meat is expanding its activities in Europe, including Germany, the Netherlands and the United Kingdom. More supermarkets will sell Beyond Meat products in these countries. The stake rose 1.3 percent.
Italian diagnostic company DiaSorin has acquired Luminex, which manufactures corona test kits, for $ 1.8 billion. Luminex added 12.6 percent.
Jefferies increased advice on Exxon Mobil from Underperform to Hold. The share fell 0.5 percent.
Medline Industries is considering putting itself up for sale, as an IPO is not excluded. The Wall Street Journal reported this weekend based on informed sources. The sale would value the US medical device manufacturer and distributor as much as $ 30 billion. It is not certain that the private company will actually be sold and the operation is in the exploratory stage.
Uber Technologies delivered a record number of meals in March. Continuing the performance in March, Uber could deliver $ 52 billion worth of meals this year, up 150 percent over the previous year. Plus, Uber’s taxi service achieved its best month of the year in March, and the number of flights booked reached an all-time high monthly. The stock rose 3.4 percent.
ABM Financial News; [email protected]; Revised text: +31 (0) 20 26 28999.
From Beursplein 5, eds ABM Financial News Developments on stock exchanges, and the Amsterdam Stock Exchange in particular, are closely watched. The information in this column is not intended as professional investment advice or as a recommendation to make specific investments.