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NEW YORK (dpa-AFX) – Signs of an easing of the trade dispute with China and a strong banking sector created a good mood on Wall Street earlier this week. American stock exchanges, after a week of losses, gradually increased their profits during trading.
The leading Dow Jones Industrial index (Dow Jones 30 Industrial) rose 1.98 percent to 31,880.24 points. Last week it fell by 2.9 percent. The market-wide S&P 500 index rose by 1.86 percent to 3,973.75 points on Monday. After initial losses, burdened with NASDAQ 100 technology turned out to be positive, rising by 1.68% to 12,034.28 points. “Despite concerns about being stuck after a record infection in Beijing, the week starts with a willingness to take risks,” wrote Landesbank BayernLB.
Experts can see the fact that the US government, due to high inflation, is considering lifting some of the Chinese import duties imposed under the Trump administration to support the course. Investors see this as a possible de-escalation of the trade war between the two economic superpowers, commented Brsian Pierre Veyret of the broker ActivTrades.
The recovery comes as no surprise to some industry experts who consider the temporary sell-off on the stock markets to be overkill. “While the economic slowdown is obvious, the question remains as to whether it is a cyclical slowdown or a recession,” JPMorgan analyst Marko Kolanovic wrote. Markets priced in more and more of the recession, but economic data did not seem to indicate this.
As in the European trading markets, the banking sector was the winner of the day. For example, optimism spread to Dow member JPMorgan (JPMorgan ChaseCo), whose top stock rose by a good six percent. With key interest rates rising far from stock and bond trading, the bank expects this year’s interest income to be over $ 56 billion – up from $ 53 billion earlier. Expert Jason Goldberg from the British investment bank Barclays commented that so far he expected “only” 55 billion.
Following JPMorgan, other financial equities also saw significant gains. Citigroup and Bank of America (Bofa) saw growth of approximately 6 percent. Goldman Sachs shares rose 3.2 percent and American Express shares rose 3.8 percent.
However, the recently heavily lowered prices, especially in the tech sector, are obviously luring potential acquisitions again. According to insiders, the Broadcom chip group is considering purchasing VMware, a software provider for cloud computing and data center virtualization. The Bloomberg news agency reported on talks between the two parties.
Speculation about it initially pushed VMware’s stake up by around twenty percent. Shortly before the stock market closed, the Wall Street Journal reported a purchase price of $ 140 per share, citing insiders, and profits rose by about a quarter. On the other hand, the Broadcom newspapers lost a good three percent.
The analyst house Bernstein Research assessed the possible deal as positive for Broadcom. Company boss Hock Tan may already show successful acquisitions in the software sector, expert Stacy Rasgon wrote.
After a fateful week for retailers, bargain hunters were digging. Ross Stores, which alienated their investors with a profit warning on Friday, rose almost ten percent. Walmart stocks recovered almost three percent.
The euro benefited from the prospect of ending negative interest rates in the euro zone. After the US market closed, the single currency cost USD 1.0686. The European Central Bank (ECB) set the reference rate at USD 1.0659 (Friday: 1.0577), the dollar was traded at EUR 0.9382 (0.9455).
In the bond market, the 10-year T-Note Future contract fell by 0.52 percent. up to 119.50 points In return, the yield on 10-year government bonds increased to 2.87% / jcf/la/ngu
— by Jan Christoph Freybott, dpa-AFX —