Take a breather on Wall Street: After records, the upward thrust fades

Tuesday 29 December 2020

Take a break on Wall Street
After records, the upward trend is flagging

After renewed all-time highs at the start of trading, profits decline on Wall Street as the year progresses. In view of the recent record hunt, the air is now getting very thin, according to participants. However, the losses are still limited.

The temporary blockade of another billion dollar package for the US economy has stalled the record hunt on Wall Street. Although the Leading index Dow Jones Industrial in the first few minutes of trading to another record high of 30,589 points, but then it turned into the red, which was 0.22 percent to 30,335.67 points at the final bell. On Monday, the US House of Representatives voted to increase the corona aid payments to citizens. That had Course rally heated again.

On this Tuesday, however, the attempt to get a quick vote on this in the US Senate failed. The Republican majority leader Mitch McConnell blocked this project initially. McConnell put the Democrats off, saying the Senate would "begin a process" this week to deal with it, along with two other President's concerns.

The S&P 500 fell by 0.22 percent to 3727.04 points. The technology-heavy one Nasdaq 100 closed 0.04 percent higher to 12,843.49 points. Like the Dow, these two stock market barometers had soared to historic highs in early trading.

The dispute over the aid package poses difficult internal discussions for Trump's Republicans and ensures unusual unity between Trump and the Democrats. Some Republicans in the Senate signaled their support for the project. Because they fear that their party could otherwise lose the upcoming by-election for the two senatorial posts in the state of Georgia.

If the democratic challengers win there, there would be a political stalemate in the Senate. In the event of a tie, the vote of US Vice President-elect Kamala Harris would tip the balance in favor of the Democrats, who would dominate Congress and make it easier for future US President Joe Biden to push through his political agenda. Price moving news about companies thins out as the year approaches.

Speculations about realignment let course rise

To the top of the Dow the shares of Intel. Speculations about a strategic realignment of the chip, software and database specialist caused the price to rise by almost five percent. According to a media report, the Third Point hedge fund, which is said to have built up a stake in Intel, has asked Intel boss Omar Ishrak to increase the value of the technology group with strategic changes. Analyst Mitch Steves from the bank RBC can imagine that Intel will bring chip production into a joint venture with another industry size, such as the Taiwanese TSMC or the South Korean Samsung. Such a step would, however, reduce the profitability of Intel considerably, said the expert.

Shares of Apple climbed a record high in the first few minutes of trading, but then investors made "cash": With a discount of 1.3 percent, the papers of the Mac and iPhone manufacturer found themselves at the bottom of the leading index Dow. The euro was last traded at $ 1.2250, having previously climbed to its highest level since April 2018 at $ 1.2275.

The European Central Bank (ECB) had previously set the reference rate at 1.2219 (Thursday: 1.2193) dollars, the dollar thus cost 0.8184 (0.8201) euros. On the bond market, the futures contract for ten-year US government bonds (T-Note future) virtually stood still at 137.95 points. The ten-year bond yield was 0.93 percent.