As the financial markets continue to experience volatility amidst the ongoing geopolitical conflicts, accompanied with high levels of inflation, consumers will be interested to note that tech giants Apple and Microsoft, as well as apps Snapchat and Uber, have seen their share prices rise in value this week, while hard commodities including natural gas, palladium, and platinum have all experienced significant price drops.
Kate Leaman, chief market analyst at AvaTrade, the success of tech giants and the drop in hard commodity prices is as a result of the following:
“On Friday, Wall Street’s main stock indexes saw significant increases. This was mainly because tech giants and other growth-oriented stocks performed well. This was reflected on our most rising table*, which saw both Apple and Microsoft deliver strong performances.
“The increase in the price of these two stocks, as well as other tech giants, was caused by a decrease in the yields of government bonds, also known as treasury yields. As well as this, investors are also quite bullish regarding the prospects of these stocks as they eagerly await next week’s reports on inflation and other important economic indicators.
“What’s more, last week, the Nasdaq Composite, known for its large number of tech stocks including Apple and Microsoft, had its best day in terms of percentage gain since 26th May. The increase represented a recovery from the losses experienced in the previous session. These losses came as a reaction to strong statements from Jerome Powell, the head of the Federal Reserve, about potentially raising interest rates.
“Additionally, Snapchat’s value has surged. This follows the app’s significant growth in users as well as enhanced engagement. In the third quarter of 2023, Snapchat saw a notable increase in its daily active users with a hike of 23 million users, adding up to 353 million in total. Elsewhere, Uber has also continued its success and risen in value. This increase follows a strong third quarter where the company’s gross bookings, trips and monthly active platform consumers witnessed an uptick. In fact, the ride-hailing service expects to build on this, with gross earnings between $36.5 billion $37.5 billion predicted for the fourth quarter.
“On our most falling table* last week, natural gas saw its share price drop due to weather forecasts predicting mild conditions resulting in less heating demand. However, as the conflict in the Middle East continues, natural gas may continue to experience volatility.
“What’s more, palladium plunged in value, falling to a five-year low below $1000 an ounce. This is largely on account of declining demand from the automotive industry – which accounts for an estimated 80% of the commodity’s global consumption – amid the continued shift towards electric vehicles, coupled with the increased substitution of palladium with platinum when it comes to producing auto catalysts.
“However, despite the swap from palladium to platinum, platinum has also experienced a fall in value. This is due to demand for the commodity wanning, particularly from the downstream automotive sector, which accounts for around 41% of total platinum demand.
“Elsewhere, Groupon’s share price has plummeted considerably in value following the release of its disappointing earnings report in the third quarter. The discount company’s revenue amounted to $126.47 million, which is significantly worse than the $126.69 million Wall Street anticipated, deterring investors.”
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