Tuesday, October 5th, 2021
Investors are becoming bolder again
Tech stocks give Wall Street a boost
Investors are using the latest price slide in technology stocks to re-enter the sector – thereby giving the US stock market momentum. Facebook is recovering from the previous day’s losses. The focus is hopefully on the labor market report on Friday.
The US stock exchanges have recovered strongly from the losses on Monday. Of the Dow Jones Index gained 0.9 percent to 34,315 points. For the S&P 500 it went up 1.1 percent that Nasdaq composite increased by 1.3 percent. According to initial information, there were 2,018 (Monday: 1,271) price winners and 1,294 (2,101) losers at the Nyse. 119 (122) titles closed unchanged.
Participants saw attractive entry levels after the drop in prices. Dan Ives, technology analyst at Wedbush, for example, believes the recent tech sell-off is unjustified. The sector’s growth prospects are massively underestimated, so the third quarter figures should give the sector a boost. At the end of the year, technology stocks are likely to be 10 percent higher, predicts Ives. New York Life Investments economist and portfolio strategist Lauren Goodwin said, “Despite some of the risks we see, company and economic fundamentals are quite constructive for markets.”
According to information from the trade, the reasons for the sell-off on Monday were the ongoing negotiations between Republicans and Democrats to raise the US debt ceiling, the global energy crisis with high oil prices and the new developments surrounding the staggering Chinese real estate company Evergrande. Fears of interest rates had mainly sent technology stocks downhill. Now we are looking hopefully at the labor market report on Friday and the reporting season for the third quarter.
However, it will take a while before the balance sheet season really gets going. Pre-trading has been made by the major US companies only Pepsico Figures published. The beverage company realized and earned more in the third quarter than expected, which is why it has raised its targets for the financial year. The stock was 0.6 percent higher.
Facebook recovers
Facebook recovered by 2.1 percent. The price of the social network of the same name fell by almost 5 percent on Monday after the company’s various services were down for hours. A “faulty reconfiguration” was responsible, as Facebook later admitted.
Yields on the bond market continued to rise, driven by the expectation of rising US interest rates. The ten-year return rose by a good 5 basis points to 1.53 percent. In the wake of returns, the dollar appreciated across the board. Of the Dollar index climbed 0.2 percent. Meanwhile skipped Bitcoin the $ 50,000 mark for the first time in a month. The cryptocurrency has worked its way up during the period of weakness on the stock market in recent weeks. It was said that interest had increased, especially from the institutional side. Meanwhile, the stronger dollar combined with higher US interest rates weighed on the gold price.
The “black gold”, on the other hand, was unaffected by the strength of the dollar, even though it did oil more expensive for non-dollar buyers. Rather, the expectation of a tighter supply caused oil prices to continue to rise sharply. They had already increased significantly the day before after the decision by Opec + to expand oil production by just 400,000 barrels per day as planned and not more in view of the global price-driving demand. The actors are now waiting for new data on US oil stocks. These come from the US industry association API late on Tuesday, and the official data from the state Energy Information Administration will follow on Wednesday.