Tuesday, August 24, 2021
New records on Wall Street
Meme stocks are back with a fireworks display
Profits are gushing at American corporations. Accordingly, investors are taking hold of the stocks and driving the Wall Street indices to new highs. There are particularly extreme price jumps in Gamestop and other so-called meme stocks.
The good mood on Wall Street has continued and set new records for the tech-heavy Nasdaq indices and at S&P 500-Index taken care of. At the end of trading they were up by 0.5 percent. Of the Dow Jones Index rose by 0.1 percent to 35,366 points.
The actors drew confidence from the almost completed Second quarter balance season. According to the Refinitiv data interpreter, the S&P 500 companies increased their profits by almost 95 percent year-on-year. According to traders, there was also optimism that the corona vaccine from Pfizer and Biontech had received official approval in the USA the day before. This could lead to more people being vaccinated and the pandemic being better controlled.
In addition, there were positive signals from the negotiations in the US Senate on the adoption of President Biden’s billion dollar spending programs.
Another topic on the market was the central bankers meeting that began on Thursday Jackson Hole with the speech of the US Federal Reserve chief Jerome Powell on Friday. Most recently, the assessment dominated again that Powell will not yet give the go-ahead for tapering bond purchases, after some rather weaker US economic data were recently published and also because of the widespread pandemic. It was also well received that US Treasury Secretary Janet Yellen should consider, according to press reports, to confirm Powell for another four years in his office, it said.
Production failure in Mexico drives oil price up
After the increased willingness to take risks on the financial markets had weighed on the dollar at the start of the week, it now showed little change. The general sideways movement of the past few days continued on the bond market, the prices are falling relatively significantly this time, so the yields rose – in the ten-year range by almost 4 basis points to 1.29 percent.
They saw a strong increase of over 3 percent Oil prices. In addition to hoping for more vaccination success and thus containment of the pandemic, which could have positive impulses for oil demand, market participants referred to a major oil production failure in Mexico due to a fire. In addition, some speculated on favorable reserve data, the announcement of which was on the calendar after hours and on Wednesday.
For the share of Palo Alto Networks it went up by almost 19 percent. The IT security company had significantly increased its profit in its fourth quarter of business and thus exceeded market expectations.
Price fireworks with meme stocks
Crowdstrike Holdings (+ 8.1%) got a boost from the fact that the shares of the information and cybersecurity expert moved up into the Nasdaq 100 index at the beginning of trading on August 26, taking the place of Maxim Integrated Products (-2.1%) . Best Buy benefited from the increase in the outlook for like-for-like sales with a plus of 8.3 percent. In addition, the electronics retailer exceeded forecasts with its second quarter figures.
International Flavors & Fragrances advanced by 0.7 percent. The German chemical company Lanxess takes over the biocide business of the US flavor manufacturer with a transaction volume of 1.3 billion dollars.
So-called meme stocks were conspicuous, i.e. stocks in which private investors cause massive price movements through joint speculation. Game stop shot up around 27 percent with no news from the company. The cinema operator’s share AMC Entertainment increased by almost 20 percent. The share of the trading platform also posted strong price gains Robinhood (+ 9.0%)which in the past was a kind of meeting point and starting point for price-driving speculations by private investors.