Fears of inflation scare US investors off

Wall Street is burdened by renewed price losses of the US technology companies. Fears of inflation and interest rates are driving investors on Wall Street to flight. The Dow Jones Industrial, which the day before had risen above the 35,000 point mark to a further record high for the first time, closed with a minus of 1.36 percent lower at 34,269.16 points. The market-wide S&P 500 lost 0.87 percent to 4152.10 meters. The technology-heavy Nasdaq 100 fell 0.06 percent to 13,351.27 points after falling 2.6 percent at the start of the week. "If you value high-growth technology stocks based on their earnings ten years from now, those surpluses are worth less than they are today when inflation rises," said Dan Eye, chief analyst at Fort Pitt. Against this background, the shares of US corporations such as Apple, Microsoft or the Google parent company Alphabet fell by up to one percent. The perfect storm is brewing on the price front, warned Neil Wilson, chief analyst at the online broker Markets.com. Currently, rising wages, rising raw material prices and the post-pandemic consumer backlog are fueling inflation. "The price pressure will not be as temporary as the US Federal Reserve thinks." Against this background, stockbrokers eagerly awaited the US consumer price data on Wednesday. Analysts expect an average inflation rate of 3.6 percent year-on-year for April. In the previous month, the value was 2.6 percent. Despite a possible rise in inflation, foreign exchange investors did not expect the Fed to tighten the monetary reins in the foreseeable future, said Karl Schamotta, chief investment strategist at the financial services provider Cambridge Global Payments. This pushed the dollar index, which reflects the exchange rate to major currencies, to a two-and-a-half-month low of 89.982 points. Business optimists shaped the mood in the industrial metals market. "You bet on an increasing demand thanks to the expected global upswing with a simultaneously scarce supply," said stockbrokers. Copper rose to $ 10,724 a ton and stayed in touch with a recent record high of $ 10,747.50. In the case of US stocks, Novavax stood out with a price slide of 14 percent. The pharmaceutical company does not expect US approval for its coronavirus vaccine until the third quarter instead of May. The delays are a disappointment, commented analyst Kelechi Chikere of the investment bank Jefferies. However, nothing will change in the medium to long-term outlook. L Brands also went downhill. The titles of the fashion and cosmetics group lost 1.8 percent. The company wants to spin off its underwear brand "Victoria's Secret" instead of selling it, as is generally hoped. According to media reports, Victoria's Secret could be valued at five to seven billion dollars on the stock exchange. The bids for prospective buyers would have been $ 3 billion. Tesla were 1.9 percent cheaper. The manufacturer of electric cars has put the purchase of a property in Shanghai on hold, as reported by Reuters, citing unnamed sources. Actually, Tesla wanted to expand its production capacities in China, but initially decided not to do so because of the tensions between China and the USA. Honeywell showed meanwhile 1.4 percent lower. The share switches from Nyse to Nasdaq. Boeing shares fell 1.7 percent. The aircraft manufacturer only delivered 17 aircraft in April, while its competitor Airbus had 45 aircraft.