Friday, August 27, 2021
Fed chief is relaxed
Powell lures Wall Street investors back
The following applies to the stock market at the moment: no news is good news. Fed Chairman Powell’s relaxed speech first made investors breathe a sigh of relief and then put them in a buying mood. Oil prices are rising and Manchester United’s papers are fueled by superstar Ronaldo’s move.
A speech by Federal Reserve Chairman Jerome Powell lured Wall Street investors back into stocks. Powell tended to meet the wishes of those who hoped for more casual statements about monetary policy. Of the Dow Jones Industrial rose by 0.69 percent to 35,455.8 points at the end. This brought the New York benchmark index a week plus of almost one percent. The other New York indices also rose, once again reaching record highs: the market breadth S&P 500 ultimately won 0.88 percent to 4509.3 points, and for the tech-heavy Nasdaq 100 it even went up 1.01 percent to 15,432.9 counters. In the Dow, however, 175 points were missing from a record that is now almost two weeks old.
Powell’s speech had been a central theme in the financial markets for days. Although he held out the prospect of a reduction in Fed bond purchases this year, he remained vague and pointed out the dangers currently posed by the corona virus. The monetary watchdog also emphasized that a reduction in bond purchases is not yet an immediate sign of an imminent rate hike.
For investors, the statements were as cautious as hoped. The details feared by some were also missing. “At the moment, no news acts as good news,” said market observer Timo Emden from Emden Research. “As long as the US Federal Reserve is poking around in the fog, the stock market can evidently continue to find a breeding ground in low interest rates,” emphasized the expert.
Oil prices on the rise
In the wake of the Powell speech, the oil values were in demand, driven by rising raw material prices, including at crude oil. Chevron’s shares were among the bigger winners in the Dow at 1.5 percent. ConocoPhillips and ExxonMobil were positive in the broader market with increases of up to 2.9 percent. But many growth stocks from the technology industry, for which low interest rates are an important pillar of their business dynamism, also made a positive impression. These included many chip values on the Nasdaq stock exchange and the record-high titles there from Google’s parent company Alphabet. Won in the Dow Walt Disney in the top group two percent, after a report in the “Wall Street Journal” had said that they were talking to betting providers about a trademark license for the sports broadcaster ESPN. This also helped the gambling companies Caesars Entertainment and Draftkings mentioned by name to rise significantly.
Quarterly figures once again contained light and shadow for investors. Especially the shares of Workday were in high demand after the cloud software company had surprised positively in the second quarter. On the downside, there were above all the share certificates of Peloton with a price slide of 8.6 percent. The fitness equipment specialist, who was considered a lockdown winner during the pandemic, reported a halving of growth for the past quarter and also unsettled investors with an unspecified accounting problem. In the computer hardware sector, the shareholders of Dell take a minus of 4.5 percent, although there were definitely positive votes about the results. Here, the market referred to profit-taking after the most recent good run.
The shares of the food delivery company Doordash lost 1.6 percent. The fact that the US metropolis New York wants to regulate the industry more tightly for a longer period of time became a dampener. But there was still good news for the shareholders of Manchester United. The football club’s shares, which are traded in New York, rose by almost six percent after the surprise announcement of the superstar Cristiano Ronaldo from Juventus Turin.
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