uLed by the technology stocks, the US stock exchanges rose sharply on Friday and thus also gained significantly on a weekly basis. The tech-heavy and interest-rate-sensitive Nasdaq 100 rose 2.06 percent to 13,565.87 points. The leading index Dow Jones Industrial increased by 1.27 percent to 33,761.05 points. The market-wide S&P 500 rose by 1.73 percent to 4280.15 points.
The weekly result is very strong with the Nasdaq 100 up 2.7 percent, the Dow up 2.9 percent and the S&P 500 up 3.3 percent. The rally has been running since mid-June. The main driver is the hope that the US Federal Reserve will control its monetary policy with interest rate increases that are not quite as large as to avoid a severe slowdown in the economy. The Nasdaq 100 alone has recovered by around 23 percent since its June low at 11,037 points and reached its highest level since the end of April at the end of trading on Friday.
Warning of exaggerated prices
For the analyst Konstantin Oldenburger from the broker CMC Markets this is also a reason to warn: “The courageous comeback of the technology stocks in the past two months has already pushed up the previously fallen valuations compared to the overall market, which could endanger the bull market, the Fed shouldn’t take their foot off the brakes when interest rates are turned around.”
The Fed had recently fought rampant inflation with unusually large interest rate hikes. She wants to follow up next month. The key interest rate is currently in the range of 2.25 to 2.50 percent. In the middle of the week, falling inflation in the USA had fueled hopes that the central bank might not be able to raise interest rates quite as much in the near future.
However, Mary Daly, San Francisco Fed Chair, said inflation is still too high and monetary policy is likely to remain tight in the coming year. For Daly, another big rate hike of 0.75 percentage points in September is quite conceivable.
All the same: US import prices gave a signal of relaxation on Friday. They fell by 1.4 percent in July compared to the previous month and thus more than experts had expected. The consumer climate at the University of Michigan also surprised positively.
Apple and Disney continue to rise strongly
In the technology sector, Apple provided further confidence with statements on iPhone production. According to the group, at least as many iPhones of the latest generation should be manufactured this year as last year. Apple is banking on well-heeled customers and dwindling competition to weather the global downturn in the electronics industry.
Apple shares were up 2.1 percent. With a gain of a good third since mid-June, Apple has clearly beaten the strong indices on the Nasdaq. At the closing price on Friday of $172.10, there is not much missing from the record high of around $183 reached at the beginning of the year. Other tech giants such as Tesla, Micron and Nvidia also rose strongly on Friday with more than four percent each.
The shares of the entertainment group Walt Disney conquered the top spot in the Dow for the third day in a row, on Friday they gained 3.3 percent. Strong quarterly figures gave a boost this week.
