Thursday 15th July 2021
“The market is now getting cracks”
Weak economic figures put the brakes on the stock market
Industrial production is weaker than expected, and worries about a possible further corona wave are also growing. The hope for a globally opening economy is shrinking. That is also reflected in Wall Street.
After new, overall mixed economic figures, the indices on the US stock exchanges fell slightly on Thursday from the record highs that were recently reached in some cases. Among other things, initial jobless claims fell to their lowest level since March 2020 and industrial production in June fell slightly short of expectations.
Market participants were worried about the spreading corona pandemic as a mood damper. It could mean interference for the actually firmly expected global opening of economic life. “We are losing time,” warned Francis Collins, director of the National Institutes of Health, on CNN in view of the slowing pace of vaccination in the United States. In addition, the actors also worried about the high inflation rates, which could also have a negative impact on economic growth. The market has recently priced in a perfect development, which is now getting cracks, commented market expert Derek Halpenny from MUFG. The risk appetite has definitely decreased.
The Dow Jones Index went with 34,987 points with an increase of 0.2 percent from the day. The other indices gave way, the Nasdaq indices with 0.7 percent 14,794.69 points the strongest. Also the S&P 500 lost 0.3 percent and ended up at 4,360.03 points. At the Nyse According to the first information, there were 1274 (Wednesday: 1413) course winners and 2039 (1890) losers. 129 (128) titles closed unchanged.
Market rates continue on the way down
The fact that US Federal Reserve Chairman Jerome Powell had again rejected speculations the previous day about a faster tightening of US monetary policy, despite the high inflation rates, was no longer supportive. He also stressed before the Senate Banking Committee that the current inflation is “uncomfortably” above the level that is compatible with the goals of the US Federal Reserve.
The yields of US bonds, which had already given way the day before after the Powell statements, plummeted further. The market said that falling interest rates showed that the US Federal Reserve will be taken at word. In addition, participants also spoke of the abundant liquidity who are looking for investments in an environment of very low global interest rates.
The dollar stabilized despite the further fall in interest rates after its setback from the previous day. The dollar index rose 0.2 percent and the Euro was only just above $ 1.18.
AIG stock benefits from deal with Blackrock
With Morgan Stanley (+ 0.2%) the last of the major US banks presented figures for the second quarter. Profit and income were above expectations. Bank of New York Mellon fell by 1.2 percent according to the quarterly report, US Bancorp according to the figures, on the other hand, increased by 3.2 percent.
The health insurer Unitedhealth Group (+ 1.3%) posted a decline in profits as patients made up for visits to the doctor that they had postponed because of the pandemic. That caused higher costs. Nevertheless, the company took in and earned more than expected and also raised its forecast for the year.
AIG went up by 3.6 percent after the insurer signed a multi-billion dollar contract with the holding company Blackstone (+ 3.9%) closed. Among other things, Blackstone is taking over shares in the Life & Retirement division for $ 2.2 billion. AIG is also selling real estate assets to Blackstone for $ 5.1 billion.
Was under great pressure Biogenic (-6.8%). The background was reports that hospitals do not want to use the Alzheimer’s drug Aduhelm developed by Biogen because they question its effectiveness. It was also said of Unitedhealth, They still need time to decide whether to bear the annual cost of $ 56,000 for Aduhelm.
Oil prices are falling – laxer limits at OPEC?
The Oil prices again fell sharply by around 2 percent, further depressed by circular reports that Saudi Arabia and the United Arab Emirates are said to have reached an agreement in the dispute over production quantities. Accordingly, laxer limits for the funding caps should apply from next month.
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