Monday 11 October 2021
Losses on US stock exchanges
Oil price rally worries investors
While oil prices continue to rise, a rare phenomenon sets in: so-called stagflation – and it makes investors nervous. The quarterly reports and the question of whether the US Federal Reserve will change its monetary policy course are once again causing tension.
Rising energy prices and the upcoming reporting season dampened sentiment on Wall Street at the start of the week. Of the Dow Jones Index and the broader one S&P 500 lost 0.7 percent each. The technology exchange Nasdaq yielded 0.6 percent.
“Investors are cautious about the upcoming reporting season,” said Tim Ghriskey, investment strategist at the brokerage firm Inverness Counsel in New York. Global supply bottlenecks and rising energy prices may have weighed on some companies’ results in the third quarter. Analysts assume that the profits of the companies in the S&P 500 are on average almost a third higher than in the third quarter of 2020. But rising inflation and higher energy prices could cloud corporate outlook.
Investors fear that the current inflation is not – as forecast by the leading monetary authorities – just a temporary phenomenon, but is leading to stagflation. Economists understand this to be the combination of inflation and a stagnating economy. It is a rare phenomenon and experts say it is difficult for central banks to get out of such a phase. “The investors are now weighing how they should deal with the changed framework conditions,” said chief analyst Jochen Stanzl from the brokerage firm CMC Markets. For better or worse, the stock market has to get used to an environment of higher inflation and higher interest rates. Dax and EuroStoxx50 also gave way on Monday.
Oil price continues rally
The price of US oil WTI rose at times by more than three percent to $ 82.18 per barrel (159 liters), the highest level since the end of 2014. The variety Brent from the North Sea rose to a three-year high of $ 84.60. In the course of the economic recovery, coal and gas prices have also risen significantly, making oil more attractive as a fuel for generating electricity and driving up prices on the crude oil markets. According to stockbrokers, there is no end to the rally in sight. “We see a very strong demand for energy in Asia and Europe before the coming cold season. As a result, oil prices will continue to rise in the near future,” said Jim Ritterbusch, head of energy consulting firm Ritterbusch and Associates.
Stockbrokers were eagerly awaiting the upcoming start of the quarterly reporting season. In the middle of the week, the US banks will allow you to inspect their books. The titles of the US bank JPMorgan, which makes the first premium of the American banks on Wednesday, and Goldman Sachs were among the biggest losers in the Dow Jones index with a minus of around two percent each.
Shares also flew from the depots Southwest Airlines after the airline had to cancel en masse flights again due to bad weather conditions. The title lost 4.2 percent. The titles of Tesla on the other hand rose by 0.8 percent. The electric car maker assumes that the first cars from the new plant near Berlin will roll off the assembly line this year, although there is still no official building permit for the factory.