Monday 14 June 2021
Investors are waiting for the Fed’s decision
Nasdaq climbs to record high
At the beginning of the week, Wall Street cannot decide: while the Nasdaq is gaining ground, investors away from tech stocks are cautious. They are now waiting eagerly to see whether the US Federal Reserve will confirm its monetary policy course.
The US stock markets started the new stock market week without a clear trend. While the standard values on Wall Street were mostly moderately in the red, the technology stocks on the Nasdaq continued their latest climb. Investors focused on the monetary policy comments and decisions of the US Federal Reserve announced for Wednesday. Most analysts believe that the Fed will stick to its extremely loose monetary policy despite the recent sharp rise in inflation.
The Dow Jones Industrial closed on Monday 0.25 percent lower at 34,393.75 points. The one representing the broad market S&P 500 on the other hand, gained 0.18 percent on 4255.15 points. For the Nasdaq 100 it went up 0.93 percent to 14,128.20 points. The technology-heavy selection index thus climbed another record high.
Even though the Fed has repeatedly stressed that the rise in inflation is only temporary, a reduction in bond purchases could be discussed. Most analysts, however, do not expect a decision before the central bank’s annual conference in Jackson Hole in August. The latest data suggested the US economy is picking up but not overheating.
The prospect of increasing fuel demand thanks to the progress made with corona vaccinations in industrialized countries and the associated dismantling of restrictions drove the oil price to its highest level in two years. The price for the variety Brent from the North Sea climbed by up to 1.1 percent to a two-year high of $ 73.52 a barrel, then closed at $ 72.74. “With the start of the summer travel season, the demand for gasoline should continue to increase,” predicted Dirk Steffen, chief investment strategist at Deutsche Bank. “Especially if the US should relax its pandemic-related entry restrictions in a timely manner.” As before on the European stock markets, the high oil price prompted investors on Wall Street to buy shares from the energy sector, which rose by around 0.3 percent.
Novavax is growing
Novavax fell 0.9 percent after initial gains. The company’s Covid-19 vaccine has shown 90 percent effectiveness in tests. Traders justified the minus with profit-taking.
In the third row, Iteos made a jump of 37.3 percent. The company has agreed to work with Glaxosmithkline to develop and commercialize an experimental cancer therapy. Iteos will receive an upfront payment of $ 625 million. In addition, there could be milestone payments of up to $ 1.4 billion.
Things also went up for Bitcoin. The cyber currency climbed back above the $ 40,000 mark after Tesla boss Elon Musk announced over the weekend that the cryptocurrency might be accepted again as a means of payment. The prerequisite, however, is that the use of renewable energies in the leading digital currency is expanded to around 50 percent.
“After the strategy swing obviously means before the strategy swing”, commented analyst Timo Emden from Emden Research on the move. After only seven weeks, Musk stopped accepting Bitcoin as a means of payment for Tesla electric cars a month ago, justifying this with the high energy consumption in the crypto sector. “Whether investors really buy Elon Musk’s back and forth at the end of the day remains to be seen,” Emden emphasized.
It went steeply up again for some individuals “Meme” stocks. Stock marketers understand this to mean values in which small investors encourage each other to buy in relevant Internet forums. The best-known example is the US video game retailer Gamestop. This time, investors took hold of shares in the computer accessories provider Corsair too, which shot up more than 15 percent. The share was recently hailed in Internet forums.
Also for the shares of the US cinema chain AMC it went up again with a plus of almost 12 percent. The company recently announced that over 80 percent of its shares are held by retail investors. In contrast, the titles fell from Lordstown Motors almost 19 percent off. Investors were frightened by the departures of the company and the finance director. The two managers took their hats after the electric pickup truck supplier warned last week that cash holdings may not be enough to keep them in business.
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