Wednesday, December 15, 2021
Fed ensures planning security
Wall Street breathes a sigh of relief
The hope for a cautious and effective action by the Fed in the likely impending rate hikes is spurring Wall Street on Wednesday. After the eagerly awaited monetary policy decisions, the major US indices are turning into positive territory.
The US stock exchanges more than made up for initial losses on Wednesday and gained significantly after the US Federal Reserve announced monetary policy tightening within the expected range. The Dow Jones index rose 1.1 percent. The S&P 500 and Nasdaq Composite advanced 1.6 and 2.2 percent, respectively.
The Fed will accelerate the repayment of its monthly bond purchases, so the program is expected to expire in March next year. This was what was expected on the basis of the latest inflation data. The central bank also announced the prospect of at least three rate hikes in 2022. For the time being, however, the Fed left the key interest rate unchanged.
With the announcement of the resolutions, the uncertainty in the market that had weighed on share prices in the past few days disappeared. Investors returned to stocks. At first glance, an accelerated tightening of monetary policy to fight inflation may not seem a good omen for the stock market, but sustained high inflation is likely to slow down the economy sooner or later and thus also hit the stock market.
Weak US retail data and a better, but not entirely convincing, Empire State Index were meanwhile of no interest. The somewhat stronger than expected US import prices underpinned the view that the Fed must act.
Pfizer asked about study
Moved among the individual stocks Pfizer by 5.9 percent. Initial studies have shown that the pharmaceutical company’s pill against symptoms of disease with Covid-19 also works with the Omikron variant, according to the company. Eli Lilly jumped by 10.4 percent, the pharmaceutical company has raised its outlook and provided a preview of the future “pipeline”. Regeneron Pharmaceuticals (-1.9%) decreased after a gradation by amber. at Adagio Therapeutics (-12.3%) the Stifel analysts lowered their thumbs and reduced the price target considerably.
After being downgraded by Goldman Sachs, the chemical share fell Albemarle by 1.7 percent. at Nucor (-8.6%) disappointed the profit forecast. Aspen Group collapsed according to business identification by 27.2 percent. The company, which specializes in technology for education, was still in the red despite increased sales.
the dollar only increased slightly after the Fed decisions. the Euro fell as low as $ 1.1222 but later rebounded and approached the $ 1.13 mark. The dollar index fell 0.2 percent.
At the Bond market the majority of the yields increased with the prospect of monetary policy tightening. the Gold price had initially given in, but turned into positive territory with the weakening dollar. In addition, the expectation of monetary policy tightening had already depressed the price of the interest-free precious metal on the previous days.
the Oil prices recovered from initial losses, especially as the dollar was unable to sustain its gains according to the Fed statements. The actors followed the Fed’s view that the economy is growing and that the pandemic will end in the foreseeable future. There was also support from a surprisingly sharp drop in US oil stocks.