Red day on Wall Street – Trump company jumped in stock market debut – E24

Hopes of interest rate cuts helped lift Wall Street on Tuesday, but the mood soured throughout the evening. Donald Trump’s stock market freshening rose sharply.

This is what it looks like on the benchmark indices on the New York Stock Exchange at closing time at 9 p.m.:

• The collective index S & P 500 ended down 0.28 percent
• The technology index Nasdaq fell 0.42 percent
• The Dow Jones index fell 0.08 percent

It is a truncated week on the stock exchange in New York, which is closed from Friday.

Thursday will thus be the last trading day of the year’s first quarter on Wall Street. During the quarter, the S & P 500 has so far climbed just under ten percent.

If the rise exceeds ten percent during the surge this week, it will then be the first time since 1950 that the index has had two quarters in a row with double-digit gains, according to Bloomberg’s calculations.

The index is also heading for its fifth straight month of gains, according to the news agency.

– The rise has been helped by an economy that has exceeded expectations, future earnings estimates that have reached record highs, technological leadership and expectations that the Federal Reserve will start lowering interest rates later this year, says Keith Lerner of Trust Advisory Services to Bloomberg.

– Less chance of the Fed surprising

He is supported by Anthony Saglimbene at the brokerage house Ameriprise.

– The shares have moved upwards in the first quarter in anticipation of the first interest rate cuts, says the analyst to the news agency.

– We are probably already in a period where there is less chance of the Federal Reserve surprising the market going forward, he believes.

The next hint about the central bank’s way forward will also come on Friday, when PCE inflation for February is published. This is the Federal Reserve’s favorite measure of inflation, and it is expected to rise cautiously to 2.5 percent.

Trump stock jumps

On Friday, shareholders in the acquisition company Digital World Aquistion Corp approved a merger with former President Donald Trump’s company Trump Media, which owns the social media site Truth Social.

Trump Media & Technology Group Corp (TMTG) goes public on Tuesday. The stock was up more than 40 percent shortly after opening.

The deal provides TMTG with more than $275 million in needed capital. The listing can also be positive for Trump, who is facing a number of legal and financial challenges, writes Bloomberg.

If the share price stays close to the pre-trade level, Trump’s shares could be worth around $6.5 billion, Bloomberg writes.

The shares are, however, subject to a six-month lockup period.

Can’t defy gravity

The IPO under the ticker DJT will test Trump’s ability to capture the attention of small savers and “hype” investors, who can use the stock to bet on his re-election bid, writes Bloomberg.

The company’s operations have so far struggled to generate profits, with a loss of $49 million in the first nine months of 2022. Revenue was just $3.4 million.

The analysts don’t like that.

– The underlying business basis will be important for some point. There is a limit to how long the stock can defy gravity, said Julian Klymochko, CEO of Accelerate Financial Technologies, according to Bloomberg.

– DJT is the mother of all meme shares.

During the evening the share was up more than 40 per cent, but ended with a rise of just over 16 per cent at closing time.

Cocoa record

Cocoa prices have risen to record highs. One ton of cocoa costs over 10,000 dollars, according to Bloomberg.

According to CNBC, cocoa is the commodity that has risen the most in price so far this year. At the start of 2024, prices were below USD 4,200 per tonne.

The price rise comes after crops in several countries in West Africa have been poor in recent years.

The CFO of Mondelez International signaled in February that price increases are most likely going forward, while Michele Buck, CEO of Hershey, has stated that “the company is committed to pricing to cover inflation”.