In anticipation of the turnaround in interest rates
Investors stock up ahead of Fed decision
03/15/2022, 11:38 p.m
After a mixed start to the week, the US stock exchanges rose again significantly on Tuesday. Among other things, a sharp drop in oil prices is having a supportive effect, as is hope for a ceasefire in Ukraine. The Fed is expected to raise interest rates for the first time in two years on Wednesday.
A day before the Fed’s expected interest rate hike, investors stock up on US stocks. They hoped for a ceasefire in Ukraine and reacted with relief to the easing of price pressure from falling energy prices. However, they were concerned about the flare-up of the coronavirus pandemic in China. The US Standard Value Index Dow Jones closed 1.8 percent higher on Tuesday at 33,544 points. The tech-heavy one Nasdaq advanced 2.9 percent to 12,948 points. The broad one S&P 500 increased 2.1 percent to 4262 points.
The stock market is certain that the Fed will raise the key rate by a quarter of a percentage point on Wednesday. “We’ve been talking about rate hikes for about a year,” said Christopher Grisanti, chief investment strategist at wealth manager MAI. “It’s good for the market that it’s finally coming and that we’re getting it over with.” He hopes that the central bankers will signal a cautious tightening of monetary policy for the coming months, despite all the concerns about inflation.
Against this background, the dollar index, which tracks rates against major currencies, was little changed at 99.092 points as the bond market eased selling pressures. This depressed the rate of return ten-year bonds to 2.144 percent.
Meanwhile, the price of US crude slipped STI by 6.4 percent to $96.41 per barrel (159 liters). The strict pandemic restrictions in some of China’s economic hubs fueled investors’ fears of a drop in demand. In their wake, the stocks of oil companies gave like exxon and chevrons about five percent each. However, investment expert Ben Sheehan from asset manager Abrdn pointed out that the worries are unfounded, since the government in Beijing has had successes in fighting the pandemic. “While consumption has faced headwinds from the ongoing lockdown measures, industrial activity has remained resilient and China has remained true to its role as a reliable partner in global trade.”
Among the favorites in the US stock market were American Airlines, Delta and United, whose titles each rose in price by around nine percent. Some airlines had raised their revenue forecasts thanks to robust demand. This offsets higher fuel prices, wrote analyst Sheila Kahyaoglu of investment bank Jefferies. In addition, she trusts Delta in particular to be able to pass on higher costs to customers.
next to it AMC into the limelight. The world’s largest cinema chain, which operates numerous cinemas in Germany, is increasing with the gold mine operator Hycroft a. This brings his papers a jump in price of up to 96 percent to $ 2.72. According to the information, AMC takes over about 22 percent of the Hycroft shares for about 28 million dollars. AMC could not initially be reached for a comment on the reasons for this investment. AMC shares were up about seven percent.