Tuesday, January 11, 2022
Buyers take courses
Wall Street interprets Powell like a dove
Fed chairman Powell has investors hanging on his lips. He has to face the US Senate before his second term in office. Above all, the sentence that a large part of the inflation is due to the pandemic and that special effects open the wallets of some buyers.
The US stock exchanges closed with profits after initial losses. The Nasdaq in particular benefited from statements made by Fed President Jerome Powell, which tended to be deaf, especially since investors here used the lower prices to gain entry. In the end the Dow Jones Index 0.5 percent to 36,252 points. For the broader one S&P 500 it went up 0.9 percent. The technology-based Nasdaq Composite gained 1.4 percent.
Powell spoke before the Senate Committee on Banks. He affirmed that he wanted to fight inflation and that the economy no longer needed the aggressive stimulus. But he also said that most of the inflation was due to the corona pandemic. He was optimistic that supply chain bottlenecks were easing, which will help lower inflation. With the statements, the dollar fell while stocks and gold rose. Powell was interpreted as “dove-like”, especially in contrast to the hawk-like recent Fed protocol. False statements by other Fed members hardly put a brake on it.
At the Bond market turned the returns into the red. Especially at the short end, returns came back with the Powell utterances. Initially, the yield on ten-year paper also rose slightly. With Powell’s statements, the dollar was easier to see Dollar index lost 0.4 percent. A less aggressive monetary policy makes the currency less attractive. After the dollar’s strong gains in the second half of 2021, the upward path for the greenback will become increasingly rocky, participants said. gold benefited from the falling dollar and the hope for a less tight monetary policy. The troy ounce went up by $ 21 to $ 1,823.
At the Oil market prices recovered massively from the previous day’s taxes. The oil supply continues to lag behind demand, according to participants. The big OPEC oil producers have committed to gradually increasing their supply, but the production is less than promised, according to ANZ analysts.
Individual notifications make courses
The paper of the chip company Intel increased by 1.3 percent. The group has found a successor for the retired Chief Financial Officer George Davis in May. David Zinsner, currently still CFO at Micron Technology, is to take over the position. Micron announced that Chief Business Officer Sumit Sadana will also temporarily assume the then vacant role of CFO. The search for a successor has begun. The titles of Micron gained 0.3 percent.
In addition, Intel removed references to the Chinese region of Xinjiang from an open letter the company sent to its suppliers last month. The letter had caused an uproar on social media in China. In the letter, Intel had asked its global suppliers not to source any goods from the northwestern China region.
IBM decreased by 1.6 percent. UBS has downgraded the stock to a “Sell” because of concerns about sales growth after the spin-off of Kyndryl Holdings and because of doubts whether IBM is competitive in the cloud market.
Pfizer rose slightly by 0.8 percent. The company is working on a hybrid vaccine that will cover coronavirus variants including Omikron. If necessary, approval should be applied for by March, according to CEO Albert Bourla. The shares of CVS Health advanced 0.9 percent after the company raised its earnings forecast for 2021.
Albertsons did not benefit sustainably from surprisingly strong business figures and a higher annual profit forecast. After an initial pre-market price jump of over 5 percent, the supermarket operator’s shares were 9.7 percent in the red. Investors should take profits here, as the share rose by a good 90 percent in the past year.
The share of American Airlines gained 1.2 percent after the airline raised its forecast for the fourth quarter. Business was not as bad as expected. Sales are likely to have declined by 17 percent compared to the fourth quarter of 2019, i.e. before the outbreak of the pandemic, after a minus of 20 percent had previously been promised.
Boeing prices rose by 3.2 percent. The aircraft manufacturer delivered 340 commercial aircraft last year, 99 of them in the fourth quarter. The US group has thus more than doubled its aircraft deliveries in 2021 compared to 2020, as planned.