Thursday, August 26, 2021
Wall Street investors lie in wait
US stockbrokers keep their powder dry. Before Fed Chairman Powell’s speech, hardly any major commitments are made. The values of retailers are also under special observation. The further development of the pandemic is too uncertain.
After several days of profitability with mostly small surcharges in the indices and the 51st record high of the S&P 500 in the current year, the US stock exchanges have given way. The upcoming appearance on Friday by US Federal Reserve President Jerome Powell at the virtual central bank meeting in Jackson Hole caused restraint. In addition, developments in Afghanistan were frightening, where dozens of people were killed in a series of attacks at Kabul airport, including several US soldiers.
New US economic data hardly moved, both the number of weekly initial jobless claims fell in line with expectations, as did the second reading of US GDP growth in the second quarter with a plus of 6.6 percent. In the end came the Dow Jones Index fell by 0.5 percent to 35,213 points and, like the other indices, closed just above the daily low. The broader one S&P 500 and the technology-based Nasdaq Composite gave in similarly.
Propensity to take profits
The majority of Powell’s speech is not yet expected to announce a tighter monetary policy, which is unfavorable for the stock market, in the form of a reduction in monthly security purchases (tapering). However, because this has not been agreed, some actors have tended to take profits. Economists are more likely to expect taper signals in September or October. The economic data are good, but the momentum is slacking off and fears of inflation have not increased, commented Paolo Zanghieri, economist at Generali Investments, on the prevailing expectations.
The stock market rose Salesforce.com 2.7 percent to $ 267.79 and were the clear front-runner in the Dow Jones index. The company had significantly exceeded expectations with its figures for the second quarter. The SAP competitor also raised its outlook. Canaccord Genuity then raised its target price from $ 270 to $ 305. Snowflake gained 7.6 percent. The company, which also specializes in cloud computing, had more than doubled its sales.
Retailers under pressure
Autodesk (-9.4 percent) disappointed with the outlook for the current third quarter. The software company’s second quarter figures were in line with analysts’ expectations. Williams-Sonoma made a rate of a good 9 percent after the interior designer had introduced a dividend increase and a new share buyback program. Dollar tree fell in price by over 12 and Dollar general by 3.8 percent. The two discounters disappointed with new information on business development.
For Abercrombie & Fitch went 10.4 percent south after the textile retailer missed expectations with its second quarter sales. That the net profit clearly exceeded expectations didn’t help. Profit-taking could also have played a role in the sharp drop in the price, as the price has almost doubled since the beginning of the year. In the past few days, good business figures were often no longer recognized by other companies in the retail sector, on the one hand because the standards are very high, and on the other because there have recently been signals from the retail sector that the dynamism is slowing.