Wednesday July 14, 2021
Good news for investors
US money glut pushes stock exchanges to record high
The prospect of a continued glut of money from the US Federal Reserve attracts investors back to Wall Street. In addition, encouraging company balance sheets brightened the mood.
The broad benchmark index S&P 500 rose on Wednesday by up to 0.6 percent to a record high of 4,393.68 points. The Dow Jones and the tech-heavy one Nasdaq also gained slightly, but initially missed new records. US government bonds were also in demand. This pushed the yield on trend-setting ten-year bonds down to 1.364 percent.
“There was a tug-of-war in the market between concerns about high inflation and concerns about tightening monetary policy,” said Randy Frederick, manager at brokerage firm Charles Schwab. “As long as Fed Chairman Jerome Powell says he won’t raise rates, stock markets will do well.” During a hearing before the US Congress, Powell reiterated that the current price pressure is temporary and will ease “in the coming months”. In addition, the labor market is still “a long way” from the level at which his house will reduce monetary support for the economy.
In line with the development of interest rates and the Powell statements, the U.S. dollar noticeably back after the strong increase from the previous day. The dollar index fell 0.4 percent. The euro rose to around $ 1.1836 from recent lows below 1.1775.
At the Nyse According to initial information, there were 1,413 (Tuesday: 831) course winners and 1,890 (2,513) losers. 128 (124) titles closed unchanged.
Light and shadow in company balance sheets
On the corporate side, the accounting season began with business figures from the major banks Bank of America, Wells Fargo and Citigroup further. Similar to Goldman Sachs and JP Morgan, which had already published their figures on Tuesday, these financial institutions also benefited on the profit side from the reversal of provisions that had been set up during the pandemic.
However, the income side caused disappointment, for example at Bank of America (-2.5%). Wells Fargo (+ 4.0%), on the other hand, posted higher revenues than expected. Citigroup (-0.3%) exceeded market expectations, with revenues falling at least less than expected.
At Blackrock (-3.1%) was apparently not good enough, because the quarterly figures of the asset manager can actually be read well, traders tried to explain the price reaction.
In contrast, the papers of American Airlines, which increased in price by a good three percent. The airline announced the first positive cash flow in a quarter since the outbreak of the coronavirus pandemic. competitor Delta Air Lines returned to profitability in the past quarter. In the wake of price losses in the entire industry, Delta shares were unable to maintain their initial profits and lost 1.6 percent.
With the Oil prices it went down significantly, by up to 3.4 percent. You moved in the area of tension between a compromise within Opec + and new inventory data from the USA. As expected, the latter fell again for crude oil, and more clearly than expected. However, the supply of gasoline rose and a further increase in weekly oil production in the USA to a 14-month high was reported.
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