Monday 15th November 2021
Slight losses on Wall Street
Investors are reluctant to buy stocks
Traders are relieved by the positive business reports from US companies. Nevertheless, the Dow Jones does not rise – it sinks by 13 points. The big winner is Boeing: The share is on the rise.
Wall Street was volatile at the start of the week. In the end, the leading indices showed little change. At first, investors were even more positive, with hopes resting on the virtual summit between China’s President Xi Jinping and US President Joe Biden late in the evening. But that was not enough for a sustained upward movement, especially since the indices are near their record highs. Investors are relying on a further rapprochement between the USA and China in a tense relationship, for example on trade issues, it said. But there are still too many question marks.
The former head of the New York Fed, William Dudley, sets the tone. He believes the Fed will need to raise its short-term interest rate target from close to zero to three to four percent. The central bank must raise interest rates faster and harder “than people think,” said the still influential Dudley in an interview with Bloomberg TV. Of the Dow Jones Index noted 13 points lighter with 36,087 points. Also the S&P 500 and the Nasdaq Composite tend almost unchanged. The technology stocks in the Nasdaq are burdened by rising returns.
Against the background of galloping inflation, the question of who will lead the US Federal Reserve in the future is becoming increasingly important. According to a report, Biden seems to be wavering only between incumbent Jerome Powell and Fed governor Lael Brainard, who is considered a monetary dove. Their chances have recently increased, which the stock exchange is happy to take note of.
The losses are however limited. Overall, traders speak of a relief about the unexpectedly positive reporting period for companies, which is creating a friendly mood on Wall Street. “Investors were quite concerned about the third quarter results, but we weathered them very well,” said investment strategist Edward Smith of Rathbone Investment Management. Positive economic data are also providing a tailwind: business activity in the manufacturing sector in the New York area rose significantly more strongly than expected in November.
Boeing with good demand
Boeing gain 5.5 percent after the aircraft manufacturer reported new orders for its converted cargo planes over the weekend. Regeneron Pharmaceuticals tighten by 2.6 percent. The company’s board of directors has given the go-ahead for a share buyback of up to $ 3 billion. For the first nine months of 2021, the company had recently reported a profit of $ 5.85 billion.
the American Tower (-4.3%) buys the US company Coresite Realty Corp. (+ 3.6%) for $ 10.1 billion. The merger is intended to bring together two companies that provide communication and data infrastructures. American Tower is a real estate mutual fund that has a portfolio of hundreds of thousands of communication towers and other locations. Coresite has a portfolio of data centers.
Activist investor Mantle Ridge has built a larger stake in Dollar Tree. He wants to force the discount retailer to take measures to increase the price. It is currently increasing by 14.3 percent. Of the Exchange shell (SPAC) Gores Guggenheim merged with Polestar, a manufacturer of electric vehicles. The titles increase by 15.5 percent. Wework increase according to business card by 3.4 percent. The office space manager has limited the loss. Tyson Foods advanced by 3.5 percent after surprisingly positive fourth quarter figures and the announcement of an efficiency program.
Oil prices on the decline
Of the Dollar index gains a strong 0.5 percent. Foreign exchange analysts assume that the greenback will continue to gain. “Last week’s surprisingly strong US inflation data fueled speculation that the US Federal Reserve must act faster and more aggressively by accelerating the reduction in bond purchases and aiming for a rate hike,” the ING said.
Not much is happening with gold. the Oil prices on the other hand, give in slightly over the course of the day: Traders are talking about speculation booming again that US President Biden could throw parts of the US’s strategic oil reserves on the market. Quotes are falling on the bond market. The rise in yields with the circulating rate hike expectations continues, but not at the short end of the market of all places. Because this reacts more sensitively to speculation about rate hikes. The likelihood of an interest rate hike in June 2022 had recently risen significantly.