Thursday, January 06, 2022
After the descent the day before
Wall Street is stabilizing again
The interest rate fright emanating from a paper from the US Federal Reserve is still deep in the bones of the stock exchange traders. But the main indices on Wall Street are stabilizing and recording only slight losses. Oil prices will rise by up to 2 percent. Another reason is the unrest in Kazakhstan.
The US stock exchanges went on a shaky stabilization course after the price slide the previous day. The interest rate fright emanating from the minutes of the most recent central bank meeting was still noticeably in the limbs of the market participants. In addition, market rates continued to rise for the fourth day in a row following the signal that rate hikes might be quicker to contain inflation. the Dow Jones-Index was down 0.5 percent to 36,236 points, the S&P 500 yielded minimally, the particularly battered ones Nasdaq-Indices as well. The stocks included here are considered to be particularly sensitive to interest rates because many of them are growth companies that are often highly valued in anticipation of future profits.
The upward trend in interest rates reflects the expectation that the Fed will not allow itself to be deterred by the corona pandemic in its monetary tightening. The minutes of the central bank meeting published the previous evening had confirmed this surprisingly clearly.
The economic data of the day at least did not fuel interest rate speculation any further and in this respect caused some relaxation on this side. The weekly labor market data was slightly worse than expected, while the US service sector purchasing managers’ index not only fell sharply in December, it also fell far short of expectations. But it still clearly points to growth.
Energy stocks and bank stocks win
In addition to energy stocks (+2.3 percent), which were supported by significantly rising oil prices, the day’s winners were bank stocks (+2.5 percent). Because rising market rates make the traditional banking business more profitable and also benefit the insurers (+1.4 percent) in their search for high-yield investments.
Limped in the oil sector Chevron (+0.9 percent) a little behind. Due to the unrest in Kazakhstan, the company had to reduce its production there in a joint venture. Walgreens Boots Alliance exceeded expectations in the past quarter and also raised the annual targets; however, the stores in the pharmacy chain are suffering from a lack of staff, which has a negative impact on sales. The course fell by 2.9 percent. Nikola gained 3.3 percent. The shipping company Saia wants to buy or lease up to 100 battery-powered Nikola semi-trailers.
Humana dropped nearly 20 percent after the healthcare company slashed its forecast for new registrations for its Medicare products. Bed Bath & Beyond reacted to consistently weak business figures with a plus of 8 percent, after it had looked like losses before the market. According to the numbers provided by the interior designer, wild price movements are now almost normal. Datadog (-1.1 percent) only initially responded positively to a partnership between the cloud security company and Amazon Web Services.
The gold price is falling
the dollar rose slightly, while the very risky cryptocurrencies fell. The one that doesn’t generate interest gold went down significantly by $ 22 and fell back below the 1,800 mark.
the Oil prices increased by up to around 2 percent. The unrest in the oil-producing country of Kazakhstan and the failure of a pipeline in Libya led to purchases here. In addition, some actors interpreted the unwavering tightening course of the US Federal Reserve to mean that the US economy is evidently in such good shape that even interest rate hikes should not throw it off track. The consequence could then be higher oil demand.