The Dow Jones Industrial Index gained on the first day out of three, while Wall Street welcomed Arm’s IPO and positive economic data. The Dow Jones rose by 331 points, equivalent to 0.96%. The S&P 500 index saw an increase of 0.84%, and the Nasdaq Composite increased by 0.81%.
Although the central bank will keep interest rates steady this time, markets will likely remain volatile in the coming months. Futures pricing data for federal funds show a probability of about 40 percent that rates will increase at the November meeting.
The yield on ten-year government bonds is declining at 4.2%, while the dollar has strengthened against the euro, reaching 1.067. Meanwhile, oil prices have reached their highest levels since November 2022, with WTI at $89.65 and Brent at $93.44.
The value of Arm’s stock increased by over 24% to close at $63.59 per share on the first day of trading. After the start of trading on Thursday, Arm’s IPO was valued at $51 per share. Investors hope this could be the biggest tech IPO of the year and revive the tech IPO market.
During yesterday’s trading, at 3:30 PM, First Wave Biopharma, a biopharmaceutical company, made a significant leap of 118%, bringing its stock value to $0.94. This surge was triggered by the announcement of an exclusive agreement with Sanofi to license Capeserod, a promising selective partial agonist of the 5-HT4 receptor.
The deal includes an initial minimum payment, with additional milestones and royalties in the future. First Wave Biopharma will use Capeserod as a foundation for developing a new gastrointestinal drug, with the first clinical studies scheduled for 2024. This marks a significant milestone for the company in the biopharmaceutical sector.
On Thursday, the European Central Bank announced an expected increase in interest rates by a quarter of a percentage point. However, it was noted that inflation is trending downward, and the ECB suggested that we may be nearing the end of this upward phase.
According to the post-meeting statement, the ECB’s Governing Council stated, “Based on its current assessment, we believe that the ECB’s key interest rates have reached levels that, if maintained for a sufficiently long period, will significantly contribute to the return of inflation to the target level.”
FOLLOWING THESE RECENT INCREASES, the ECB’s critical rates for refinancing, marginal lending, and deposit now stand at 4.5%, 4.75%, and 4%, respectively. The ECB closely monitors the economy’s performance and inflation in the Eurozone while making crucial decisions for the Union’s financial future.
The recent increase in gasoline prices has significantly contributed to last month’s inflation rise. In August, fuel costs increased by 10.6% compared to July, compared to a 0.2% increase the previous month. The Bureau of Labor Statistics identified gasoline as the primary driver of overall inflation growth, accounting for over 50% of the Consumer Price Index.
The national average gasoline price stood at $3.85 per gallon, with an increase of about 14 cents compared to the previous year and 5 cents compared to last week. However, energy industry experts point out that the increase in gasoline prices has been moderate compared to the rise in crude oil, which is approaching $90 per barrel, increasing by over 7% in the last month and about 12% since the beginning of the year, mainly due to Saudi production cuts in recent months. A more concerning aspect of inflation has been the rise in diesel prices, which, while still about half a dollar lower than the previous year’s highs, has risen from an average of $4.30 in July to $4.51 yesterday.
Higher mortgage rates continue to hinder mortgage demand, especially for refinancing. According to the Mortgage Bankers Association’s seasonally adjusted index, total mortgage application volume decreased by 0.8% compared to the previous week. The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances – $726,200 or less – rose to 7.27% from 7.21%, with points increasing from 0.69 to 0.72, including the origination fee, for loans with a 20% down payment.
Thursday, September 14, 2023 Market Quotes
Dow Jones +0.96% at 34,907.11
S&P 500 +0.84% at 4,505.10
NASDAQ Composite +0.81% at 13,926.05