Tuesday, November 9th, 2021
Profit stretch ended for the time being
Wall Street takes a breather
Investors on the US stock exchanges are taking a breather after the recent profit streak. If General Electric’s restructuring plans were to give a boost, Elon Musk would put a small damper on his company.
After the recent price records on Wall Street, some investors are cashing in. Of the Dow Jones Index closed 0.3 percent lower at 36,320 points. The broad one S&P 500 (4685 points) and the technology-heavy one Nasdaq (15,886 points) gave a similarly strong drop.
“The markets have risen quickly and strongly,” said Emmanuel Cau, senior investment strategist at Barclays Bank. “The impulses from the company balance sheets for the third quarter are slowly running out.” He regards the current breather as healthy. The record increase in US producer prices of 8.6 percent compared to the same month last year put pressure on the buying mood. Experts also predict an accelerated rise in consumer prices due on Wednesday. “Most investors are now realizing that inflation is picking up,” said Robert Pavlik, portfolio manager at Dakota Wealth. “It is not increasing as much as originally feared, but it is increasing.”
One of the drivers of this development is the high energy prices. The US energy agency EIA raised its forecasts for fuel demand and gasoline prices in 2021. This helped the US crude oil WTI at a price increase of 3.0 percent to 83.99 dollars per barrel (159 liters). US consumer prices due on Wednesday increased investor tension. Experts expect seasonally adjusted inflation to rise by 5.8 percent in October compared to the same period in the previous year. In September it was 5.4 percent.
“If the inflation rate is above expectations, this will serve as an argument that the US Federal Reserve must raise interest rates faster,” said analyst Peter Ready from the analysis house Quantitative Commodity Research. “But the Fed is not sticking to the manual.” Therefore, some investors turned to cryptocurrencies to hedge against inflation risks. Bitcoin and Ethereum climbed to $ 67,246 and $ 4,766.77, respectively. If Bitcoin can sustainably defend its current level, a test of the mark of 100,000 dollars is possible before the end of the year, said analyst Salah-Eddine Bouhmidi from the brokerage house IG.
At the company advanced General Electric (GE) into the spotlight. The shares of the conglomerate rose 2.6 percent. The Siemens rival wants to split its medical technology, aviation and energy businesses into three of its own companies. The titles of Roblox Thanks to a strong increase in income, they even posted a record price jump of a good 42 percent and were more expensive than ever at $ 109.58. His observations indicated that the flow of customers to the online computer game platform accelerated in November, wrote analyst Clark Lampen from brokerage house BTIG.
The growth trend could continue for a few more years. For PayPal on the other hand, it went down despite sales and profit increases. The payment processor’s shares plummeted by more than ten percent. The quarterly figures fell short of expectations, complained analyst Christopher Brendler from research house DA Davidson. On this basis, he scaled back his forecasts for PayPal and lowered the price target to 275 from 325 dollars. Tesla (-12 percent) remained under strong pressure after Tesla boss Elon Musk signaled the sale of 10 percent of his Tesla shares.