No nasty surprises
Investors react calmly to Fed minutes
02/16/2022, 11:03 p.m
The first interest rate hike in the corona pandemic is imminent, but the interest rate records of the US Federal Reserve do not indicate any further steps. Investors react with relief, interim losses in the US indices are almost made up for during the day.
After the US Federal Reserve published its interest rate records, the US stock exchanges closed unevenly. The US Standard Value Index Dow Jones, which had meanwhile been in the red by just under one percent, went 0.2 percent lower to 34,934 points from trading. The tech-heavy one Nasdaq fell 0.1 percent to 14,124 points. The broad one S&P 500 put on the other hand 0.1 percent to 4475 points.
After a turnaround in interest rates, the US Federal Reserve is counting on the high level of inflation easing over the course of the year. To ease the price pressure, the Alleviate supply bottlenecks and also the less stimulating monetary policy contribute, according to the minutes of the January 26 monetary policy meeting. The monetary watchdogs agree that it will soon be appropriate to raise interest rates. But they want to decide on the appropriate course from session to session and thus drive on sight.
Markets braced for an unusually large rate hike in March felt some relief at the minutes’ balanced tone. Fearing a drastic US interest rate hike, some investors had withdrawn from Wall Street in early trading. According to experts, higher interest rates will devalue the future profits of these high-growth companies. These speculations were fueled by surprisingly strong increase in US retail sales, which are considered the mainstay of the world’s largest economy. The increase in January was almost twice as high as expected at 3.8 percent.
At the companies advanced ViacomCBS into the limelight. The quarterly profit of the TV group, which includes the stations Comedy Central and MTV, was only about half as high as expected at $0.26 per share. The necessary investments in the streaming business will reduce profitability more than previously thought, commented analyst Neil Macker from the research house Morningstar. ViacomCBS shares fell nearly 18 percent.
The papers from La Z Boy fell more than 17 percent after the upholstered furniture maker reported a surprisingly low quarterly profit of $0.65 per share. The reasons for this include bottlenecks in supplier parts and high levels of sick leave in the workforce due to the pandemic.