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Wall Street capped its fourth consecutive month with gains in February and closed at record levels

Wall Street capped its fourth consecutive month with gains in February and closed at record levels

The papers of technology companies linked to Artificial Intelligence (AI) were the driver of demand for shares during the month. Enthusiasm for AI has fueled a number of major “Magnificent 7” tech stocks, including Alphabet, Amazon, Apple, Meta, Microsoft, NVIDIA and Tesla.

In fact, semiconductor and microprocessor makers were among the standouts in Thursday’s rally, with AMD rising more than 9%, ON Semiconductors (3.2%), Microchip and NXP Semiconductors (2.4%), and Intel ( 2.5%).

The published data showed that the measure of The FED’s preferred inflation rate was above the agency’s annual goal. There were also signs that consumer spending remains strong.

The price index for basic personal consumption expenses increased 0.4% in the month and 2.8% compared to the previous year. Overall PCE, which includes food and energy categories, rose 0.3% month-over-month and 2.4% over the 12 months, compared to respective estimates of 0.3% and 2.4%.

Wednesday’s report kept intact hopes that the FED could begin cutting interest rates in June. Such a measure would ease pressure on the economy and boost investment prices, and the FED has already indicated that several cuts could come this year. In this sense, the president of the FED of San Francisco, Mary Daly, affirmed that the officials of the agency would be willing to reduce interest rates as necessary, but emphasized that “there is no urgent need to reduce them given the strength of the economy”.

“The month of February in the United States was marked by an easing of concerns about inflation towards the end of the month and a very good results presentation by Nvidia that encouraged financial markets in general. The latest data from the PCE , which shows the variation in goods and services from the perspective of consumer spending, showed a slowdown towards 2.40% in the last 12 months. This news was received with enthusiasm by investors who sought to continue incorporating equity risk into their wallets”, highlighted a report from Criteria.

The main increases in the Dow Jones were for Salesforce (3%), Intel (2.5%) and Amazon (2.1%). In the S&P 500, the increases in Hormel Foods (14.6%), FMC (9.9%) and Enphase Energy (6.6%) stood out. The best of the Nasdaq were recorded in AMD (9.1%), Marvell (6.1%) and Monster Beverage (5.8%).

On the fixed income side, the 10-year rate rose by about 35 basis points during February from 3.95% to 4.30%. “It was a month in which fixed income in general struggled to advance. Quality bonds fell 2.30% while high-yield bonds rose 0.30%. Medium-duration US Treasury bonds also fell 2.41%. In the year they are -2.73%, +0.42% and – 2.34% respectively”, they highlighted from Criteria.

European markets

In Europe, Stock markets closed the month with ups and downs and on the day, with investors closely following key inflation data. Consumer price inflation in Germany was also in line with forecasts at 2.7% year-on-year, ahead of eurozone figures due out tomorrow.

European sectors were mixed, with construction stocks rising 1.2% while healthcare and food and beverage fell 0.7%. Shares of Anheuser Busch InBev, the world’s largest brewer, fell 1.8% after narrowly missing full-year profit and revenue forecasts.

In the leading Euro Stoxx 50 index that fell 0.1% today but gained 4.9% in Februarythe increases of the German companies Allianz (2.1%) and Siemens (1.7%), the Spanish Iberdrola and the German Münich Re (1.3%) and the French Schneider Electric (1.2%) stood out.

In London, the FTSE rose 0.1% today and closed balanced for the month. In Frankfurt, the DAX gained 0.4% today and rose 4.6% in February. The CAC 40 in Paris fell 0.3% today but rose 3.5% in February. In Madrid, the IBEX 35 fell 0.7% today and fell 0.8% in the second month of the year. Milan’s MIB fell 0.1% today and gained 6% in February.

Emerging markets

On the side of emerging worldthe government of China reacted during February and lowered interest rates for real estate loans to historic lows in search of reactivating this important sector of its economy.

“This measure was very well received by the markets that saw the shares measured by the FXI ETF (Ishares China Long-Cap) rise 7.83% during February and recover almost all the lost ground in 2024”concluded from Criteria.

Source: Ambito

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