Wednesday January 12, 2022
Moderate profits in New York
US inflation data does no harm to the stock market
The sharp rise in inflation in the US is by no means causing havoc on Wall Street. On the contrary: the US indices closed slightly in positive territory towards the middle of the week. Among the individual values, the share of Jefferies falls by almost nine percent.
After the eagerly anticipated US consumer prices for December, Wall Street showed slight gains in the middle of the week. These climbed 7.0 percent compared to the previous year, within the expected range. The fact that there was no upward outlier that would have increased the pressure on the US Federal Reserve to start rate hikes earlier than previously expected helped ease the situation somewhat. On a monthly basis, however, the increase was somewhat stronger than forecast. Overall, the inflation rate is at its highest level since 1982 and is above the 6 percent mark for the third month in a row.
the Dow Jones Index gained 0.1 percent 36,290 points. The S&P 500 went up 0.3 percent. The Nasdaq composite rose 0.2 percent. At Nyse there were 1,875 (Tuesday: 2,461) course winners and 1,484 (892) losers. 120 (141) titles closed unchanged.
“All in all, it’s as bad as we expected. We expect the Fed to start raising interest rates in March, with a total of four 25 basis point hikes this year and four more in 2023,” says Paul Ashworth, Chief Economist for the United States at Capital Economics. Federal Reserve Bank of Cleveland President Loretta Mester sees the US Federal Reserve well on the way to raising its short-term rate target at its March meeting. Mester reiterated that she anticipates the Fed will hike rates three times in 2022.
The US Federal Reserve will have to hike rates more aggressively this year to contain inflation, said James Bullard, president of the Federal Reserve Bank of St. Louis. While he recently believed the Fed should hike rates three times this year, “I now think we should maybe make four hikes in 2022”.
According to a survey by the US Federal Reserve, the US economy grew moderately in the last few weeks of last year. However, growth in many districts continued to be limited by supply chain disruptions and labor market bottlenecks, according to the Beige Book economic report. The rapid spread of the Omikron variant also dampened growth.
Dollar extends taxes according to US data
According to the inflation data, the dollar his duties clearly. The dollar index fell 0.7 percent, the euro climbed to $ 1.1449, down from $ 1.1365 before the release. The dollar is struggling to generate further gains as interest rate hike expectations in the US are largely priced in, according to Credit Suisse. The yields on the bond market did not show a uniform picture. The ten-year return fell 0.5 basis points to 1.73 percent. The inflation data has not changed current expectations of an end to security purchases in March and then subsequent rate hikes, it said.
the Oil prices gained up to 1.8 percent. Traders cited weekly US oil storage data, which has fallen to its lowest level since 2018. In contrast, gasoline and diesel inventories increased significantly due to the negative Omikron effects. Investors appeared to be calm about the decline as they believed the Omikron problems were nearing their end and could result in a sharp surge in demand, it said.
the Gold price picked up again, further establishing itself above the $ 1,800 mark. “The most important finding is that gold is a spaceship and inflation is its fuel,” said Peter Spina of GoldSeek.com. “Now that inflation is firmly anchored in the system and awareness of inflation is growing, gold will benefit greatly from it.”
Jefferies buckle by the numbers
The share fell below the individual values of Jefferies 9.3 percent after the investment bank failed to meet market expectations with fourth-quarter revenues. Jefferies also announced that it would increase the quarterly dividend by 20 percent to 30 cents. Citigroup stocks advanced 0.3 percent after the bank announced that it would abandon the consumer business in Mexico as part of strategic adjustments.
The from Microsoft (+ 1.0%) planned takeover of the US software company Nuance Communications (+ 0.2%) is being examined by the British competition authorities. As announced by the Competition and Markets Authority, it has opened a formal investigation to determine whether the merger would affect competition in the UK markets. Ally Financial rose 3.0 percent. The financial services company’s board had approved a dividend increase and a $ 2 billion share buyback program.