The Tribune

By CHRIS ILLING

CCO @ ActivTrades.com

Strong big-tech balance sheets lifted Wall Street into positive territory at the end of last week. However, disappointment over the latest US labour market report limited gains. The Dow Jones Industrial Average of blue-chip stocks was trading slightly lower at 38,647 points shortly after opening on Friday. The broader S&P 500 gained 0.4 percent to 4,954 points, while The Nasdaq technology exchange index rose by just under one percent to 17,632 points.

A strong report from the US Department of Labor, however, slowed down the rally. In January, 353,000 new jobs were added outside of agriculture. Analysts had expected 180,000. This dampened speculation of an imminent interest rate hike by the US Federal Reserve, which is trying to keep inflation in check with a tight monetary policy and cool down the hot joba market. The separately-calculated unemployment rate remained at the previous month’s level of 3.7 percent in January. Here, too, experts were caught on the wrong foot, as they had expected an increase to 3.8 percent.

The big winner after the earnings report release was, once more, Mark Zuckerberg. Meta jumped by about 20 percent and was more expensive than ever at around $477. Amazon’s shares climbed by a good 7 percent. Total revenue at Meta rose by 25 percent in the fourth quarter when compared to the same period last year, growing from $32.2bn to $40.1bn, with the company issuing its first-ever dividend. The Meta chief executive told investors via a webcast about his vision for the company. “We invested heavily both in AI and the Metaverse for a long time, and will continue to do so,” said Mr Zuckerberg. “I still expect this next generation of AR, VR and MR computing platforms to deliver a realistic sense of presence that will be the foundation of social experiences.”

Another ‘Big Seven’ company also experienced a most welcome jump in its share price on Friday last week. Amazon’s shares climbed by almost 8 percent and traded at about $172. Amazon exceeded market expectations across the board with its fourth quarter 2023 and full-year figures, reporting earnings per share of $1 while analysts had expected $0.78. Net sales also exceeded analyst estimates, coming in at $169.96bn compared to the expected $166.21bn. Additionally, the important cloud revenue increased by 13 percent during the reporting period.

In Europe, the two large car manufacturers drove in higher share prices. In the automotive sector, a surprisingly high inflow of funds at Mercedes-Benz lifted investor sentiment. Shares gained 2 percent. In the wake of this, Porsche’s shares rose by 4.2 percent to the top of the German index (DAX). With its profit participation and a payout ratio of 40 percent, Mercedes has been considered one of the best dividend stocks in the Dax for years.

The savvy investor is off to a good start into 2024.

By CHRIS ILLING

CCO @ ActivTrades.com