Thursday, August 19, 2021
Impetus through figures
Wall Street digested the Fed
The Fed is thinking intensively about the withdrawal from the aid and thus scared the investors. A day later, most of them realize: It will take some more time until interest rates rise. In view of the price levels, a few market participants cashed in anyway.
Wall Street left a volatile session with small gains. Investors took into account the foreseeable exit of the US Federal Reserve from its multi-billion dollar aid policy and the increasing Covid-19 infections, but at the same time many should have realized that it will take some time until the US Federal Reserve’s first rate hike. In addition, some important US companies had presented good financial figures and given optimistic outlooks, which alleviated doubts about the earnings development.
And last but not least, the indices came under pressure the day before the publication of the Fed minutes, so that the Fed’s “bad news” was to a large extent priced into the exchange rates. The majority of central bankers consider it appropriate, under certain conditions, to start gradually reducing monthly bond purchases as early as this year, i.e. to start tapering.
Of the Dow Jones Index lost 0.2 percent, burdened mainly by heavyweight Boeing. The broader one S&P 500 and the technology-based Nasdaq composite on the other hand rose by 0.1 percent each.
New economic data painted a mixed picture. While initial jobless claims were lower than forecast and the leading indicators index was higher than expected, the Philadelphia Fed index was weaker. It is true that a large proportion of investors generally remain positive about equities, encouraged above all by the strong earnings growth of companies. But in the face of the corona pandemic and the threat of tighter monetary policy, some of them are becoming more skeptical and taking money off the table. Because of the high index levels close to their all-time highs, there is a high propensity for profit-taking. This mainly affected cyclicals on Thursday. Technology stocks, on the other hand, were sought after, driven by the strong business figures of some industry companies
Cisco rose by 3.8 percent. The company exceeded expectations with its number of figures for the fourth quarter of the financial year, but the outlook was not convincing in all respects.
The graphics chip maker Nvidia had done better than expected in terms of profit and sales and reported record sales in the business areas of video games and data centers. Investors recognized this with a price premium of 4.0 percent. The courses of the chip competitors Intel and AMD lagged behind.
The shares of cruise operators were sold, depressed by the recovery in the number of infections caused by the corona pandemic. Carnival lost 3.6 percent, Norwegian Cruise 3.5 percent and Royal Caribbean 0.9 percent.
Retail stocks posted strong gains after Amazon announced the opening of smaller department stores. Macy’s also received a tailwind from the department store chain’s convincing business figures. The share went up almost 20 percent. Kohl’s improved by 7.3 percent.
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