Copper and crude oil in demand again
FED statements calm Wall Street
7/7/2022 10:39 p.m
In order to get a grip on rising inflation, the US monetary authorities are considering another interest rate hike at the end of July – albeit not as much as some investors feared. The news provided relief on Wall Street. Among the day’s winners are stocks from chipmakers like AMD and Intel.
Positive statements on US monetary policy give Wall Street a boost. In addition, hopes for a growth spurt in trading partner China and encouraging business figures from the electronics group Samsung brightened the mood.
Of the Dow Jones Industrial ultimately gained 1.12 percent to 31,384 points and made up for the losses it had accumulated since the end of June. The market breadth S&P 500 rose by 1.50 percent to 3902 points and is now exactly 19 percent below its record high in January. It has thus recovered somewhat from its one-and-a-half-year low in June. The tech-heavy one Nasdaq 100 gained 2.16 percent to 12,109 points on Thursday. It is almost 28 percent below its peak reached in November 2021.
In the minutes of the most recent meeting published on Wednesday, the FED signaled a further interest rate hike by half a percentage point or three quarters of a percentage point for the end of July. This is a relief for investors, as some central bankers had raised the matter by a full percentage point, said stock trader Dennis Dick of brokerage house Bright Trading.
Should inflation data come down next week, the key rate is likely to be raised just 0.5 percentage point. So far, investors estimate the probability of this at just 17 percent. Most of them expect a step of 0.75 percentage points. In any case, the recent recession fears are exaggerated, said Kevin Thozet, investment advisor at asset manager Carmignac. Economic data suggested that US growth, while slowing, was not imminent.
Highest quarterly profit for Samsung since 2018
Meanwhile, Bloomberg news agency reported that the Chinese government wants to allow local governments to issue additional bonds worth $220 billion to finance infrastructure projects. This inspired copper, which recently fell to a year-and-a-half low. With a price increase of up to 5.6 percent to $7943 per ton, the industrial metal is heading for its biggest daily gain in a good nine years. China is the world’s largest copper buyer.
Investors also stocked up on crude oil again. The US variety STI rose 5.4 percent to $103.84 a barrel. This helped oil companies like exxon and chevrons and the mining company Freeport-McMoRan to price gains of up to 6.4 percent.
Semiconductor stocks were among the favorites on the US stock market after the South Korean group Samsung announced its highest quarterly profit since 2018 thanks to a booming chip business. The titles of AMD, intel, microns and Nvidia advanced up to five percent. The papers were also in demand Virgin Galactic, which temporarily gained 14 percent. The space company develops carrier aircraft for spaceships together with a subsidiary of the aircraft manufacturer Boeing. Boeing shares rose 3.5 percent.
at Bed, Bath & Beyond encouraged investors to buy shares from several managers of the furniture store. The company’s titles recorded one of the largest jumps in the company’s history with a rise of almost 30 percent at times to $5.78.