Wall Street at a record high - Strong quarterly figures drive stock indices, but labor market data cause interest rate euphoria.

Wall Street at a record high - Strong quarterly figures drive stock indices, but labor market data cause interest rate euphoria.

According to a report from www.tagesschau.de,

Wall Street hit new record highs to close the week, driven by strong quarterly reports from big tech companies like Meta and Amazon. The Nasdaq 100 rose 1.72 percent to 17,642 points, while the composite index rose 1.74 percent to 15,628 points. The S&P 500 closed at 4,958 points, up 1.1 percent. The American economy added 353,000 new non-farm jobs, increasing average hourly wages by 0.6 percent. Despite strong labor market data, the numbers point to a robust labor market and rising wages. The Federal Reserve will therefore likely delay its interest rate cut plans, prompting investors to mask interest rate concerns and buy stocks. In response, shares of Meta rose 20.32 percent to a new record high, while shares of Amazon rose 7.87 percent. The DAX also rose and reached a new record, but ultimately only closed 0.35 percent higher. The high US level is mainly supported by the prospect of falling interest rates as stock markets do not reflect fundamentals. The European economy and the German stock market cannot keep up with the dynamics of Wall Street. The euro has fallen and so has the price of gold. E.ON and SAP posted strong quarterly figures, while takeover talks between Adnoc and Covestro proved difficult.

The implications of this data show that US stock markets continue to bet on the expectation of falling interest rates, leading to an ongoing bull market. However, robust labor market data and rising wages point to a strong labor market, reducing the need for a rate cut. This could cause long-term volatility in markets as investors may adjust their expectations of monetary policy. The positive quarterly figures from Meta and Amazon show that the tech sector continues to be a strong driver of the market, while European markets are lagging behind. The takeover negotiations between Adnoc and Covestro could influence the dynamics of the German stock market, especially if a takeover were to take place. Meanwhile, strong quarterly results from E.ON and SAP could help boost investor confidence in the European market.