Tuesday, September 21, 2021
Evergrande not a “Lehman moment”?
Wall Street is recovering from the losses
After the heavy losses from the previous day, Wall Street is more confident again. Analysts assume that the crisis surrounding the Chinese real estate company Evergrande will not turn out to be a “Lehman moment” after all. The Fed’s decision is eagerly awaited.
After the strongest one-day setback on Wall Street in four months, stabilization was announced on Tuesday. Of the Dow Jones Index and the S&P 500 fell by 0.1 percent each during the Nasdaq composite by 0.2 percent. In 1924 (Monday: 532) course winners and 1361 (2798) losers were seen. 124 (107) titles closed unchanged.
Sales on Monday were driven by the crisis surrounding the Chinese real estate group Evergrandewho got into financial difficulties. Chief market strategist Marko Kolanovic of JP Morgan spoke of an “overreaction” and of technically driven sales in an environment of low liquidity. Kolanovic also expects a recovery because the delta variant of the corona virus is on the decline. He also expects companies to exceed expectations in the third quarter. Meanwhile, Wall Street analysts stressed that China Evergrande is not a second Lehman. The Lehman bankruptcy was one of the causes of the financial crisis in the USA in 2008.
“A real ‘Lehman moment’ is a crisis on a completely different scale,” said the Barclays strategists. that the banks are unwilling to meet in the interbank market. And with all that we would have to see massive political errors on the part of the Chinese authorities. ”
Pessimistic streaming forecast weighs on Disney
Evergrande worries come at a critical juncture as several experts have rightly warned that September could be bumpy for US equities after a calm summer. In addition, today, Tuesday, the first part of a two-day Central bank meeting started, which could lead to a tighter interest rate forecast, and Congress has been unwilling to raise the debt ceiling as it struggles to reach an agreement on a package of infrastructure spending.
By far the weakest value in the Dow Disney (-4.2 percent). According to CEO Bob Chapek, the streaming service Disney + will probably gain fewer subscribers than hoped for in the current quarter. Lennar’s shares were down 0.5 percent. The construction company cited “unprecedented challenges in the supply chain” when it released its third quarter results. Therefore, the number of completed houses remained slightly below the expected range. But the demand is still high, it said.
About Technologies on the other hand rose by 11.5 percent. The company expects to be profitable in the current quarter – months earlier than previously thought. The stock of the Uber rival Lyft increased by 6.5 percent. Draft kings fell 7.4 percent. The company is offering $ 20 billion for the UK sports betting company Entain.
As the willingness to take risks increased again, the US dollar fell slightly. The dollar index narrowly maintained its position. Government bonds showed little change before the Fed meeting, the ten-year yield rose 1 basis point to 1.32 percent. On the other hand, benefited oil from the improved mood on the stock market, although prices could not hold their daily highs. Also the Gold price increased, supported by the ailing U.S. dollar.