Monday, October 25, 2021
Technology stocks in focus
Wall Street remains on the hunt for records
After a mega-deal with the car rental company Hertz became known, the electrical manufacturer Tesla broke the sound barrier of one trillion dollars with its market value. On Wall Street, investors are eagerly awaiting the Facebook numbers that are to be published after the market closes.
The record hunt on Wall Street continued into the beginning of the new week, with investors betting on good business results. The US reporting season continues to pick up speed over the course of the week, with major technology companies in particular opening their books. A total of 150 companies from the S&P 500 will present their quarterly figures.
The reasons for the optimism of investors were, among other things, the good results of the banks and of companies in the consumer goods sector from the previous week, which at the same time dampened worries that high inflation and labor shortages are melting profits. It is remarkable how the companies have managed to pass price increases on to customers without losing sales, said CMC market expert Michael Hewson.
Of the Dow Jones Index improved by 0.2 percent to 35,741 points. Of the S&P 500 gained 0.5 percent. Both indices thus closed at record levels. Of the Nasdaq composite advanced 0.9 percent. The 2098 (Friday: 1671) price winners were compared to 1261 (1615) losers. 113 (140) titles closed unchanged.
Facebook opens round of quarterly technology figures
After the market closes Facebook open his books, the share closed after initial sales 1.3 percent in the plus. On Tuesday are Microsoft, Twitter and alphabet It’s your turn and later in the week Apple and Amazon will follow.
“Without a doubt, the technology sector is the most important sector for the S&P 500,” said Eric Mintz, co-portfolio manager at Eagle Asset Management. “I expect broadly robust results from the technology sector.”
Another topic was how central banks around the world will react to rising prices. In addition, new signals could come from the ECB and the Bank of Japan over the course of the week, after the US Federal Reserve has already announced a possible increase in interest rates for the coming year. The US ten-year return of 1.64 percent was at the recently significantly increased level.
The market participants also had an eye on how things will continue with the extensive spending package by US President Joe Biden, which is being discussed further in the US Congress. Spending on this scale would continue to support growth, said Flowbank investment expert Esty Dwek. “The question now is how things are going with taxes and how all of this should be financed,” she added.
Tesla cracks market capitalization by a trillion dollars
The main focus was on TeslaShare, which rose 12.7 percent to $ 1,024.86. The electric car maker is now one of the companies with a market capitalization of over a trillion dollars.
Market participants cited several reasons for the increase. The US car rental company Hertz has announced that it will order a total of 100,000 Tesla vehicles. In addition, Morgan Stanley has raised its target price for the share from 900 to 1200 dollars. In addition, the company’s Model 3 was the best-selling vehicle in Europe in September, as the analysis company Jato Dynamics has determined.
Gold with inflation concerns at six week high
gold (+ 0.8%) was more expensive than in six weeks. Even the high market interest rates and the stronger dollar did not slow down, because many investors bought the precious metal to protect against inflation because of the high inflation.
Over the course of the year, oil prices climbed to new seven-year highs, but gave up a large part of the profits again in late trading and showed inconsistent results. “The upside risk for crude oil is real and a short-term spike to $ 100 a barrel is not ruled out as oil becomes a substitute for heating and electricity, especially in Asia,” Rystad Energy said.
The renewed soaring of WTI and Brent drove the prices of the oil stocks further. The papers of Exxon Mobil (+ 1.9%) and Chevron (+ 0.9%) were among the biggest winners in the Dow. The energy sector in the S&P 500 climbed 1.4 percent.
As a reason for the rising oil prices, reference was made to statements from Saudi Arabia, according to which OPEC + should take a cautious approach on the supply side because of the risk that demand could decline again due to the pandemic. The switch from gas to oil is also contributing to the price increase against the background of the sharp rise in gas prices, it said. Gas prices rose significantly, for which market experts referred to forecasts of cooler weather, but also the expiry of options contracts on Tuesday.