Thursday June 24th 2021
Two new all-time highs
Biden gives Wall Street renewed confidence
The US exchanges are in rally mode, with both the S&P 500 and the Nasdaq hitting new highs. Responsible for? US President Biden and tech stocks that investors seem to want again after a brief crisis. Value stocks, on the other hand, lose their attractiveness.
US President Joe Biden also put investors on Wall Street in a buying mood on Thursday. In the struggle for the infrastructure package, Biden had announced an agreement in the Senate. According to US media reports, the compromise has a total volume of around $ 950 billion. Biden originally proposed an infrastructure package worth more than two trillion dollars. But that met with massive resistance from the Republicans. The deal gave the US stock exchanges fresh momentum. The Dow Jones-Index rose 1 percent to 34,197 points, S&P 500 and Nasdaq-Composites gained 0.6 and 0.7 percent, both indices marked all-time highs.
“It’s a sign that people’s confidence is returning,” said Robert Pavlik, portfolio manager at Dakota Wealth. “How long this development will last, however, is the big question.” A surge in bond yields could quickly change sentiment. The US bonds hardly moved, however. The trend-setting ten-year Treasuries yielded little changed at 1.495 percent.
High-growth technology stocks appeared more attractive again after the recent price declines, Pavlik continued. On the other hand, value stocks, which investors have recently increasingly focused on, have become relatively expensive. In addition, the first US interest rate hike is expected to be on the agenda in two years at the earliest, said analyst Jochen Stanzl from online broker CMC Markets. “The investors now apparently want to use this time window.”
Against this background, the stocks of technology companies such as Facebook, NVidia and Microsoft at record highs. Independently of this, Microsoft presented “Windows 11”. The new version of the computer operating system announced for the end of the year is the first major revision since 2015.
Construction companies benefit
Driven by Biden’s plans, the title of construction machinery manufacturer led Caterpillar with a plus of 2.6 percent, the Dow tableau also started. Just Boeing (2.9) closed more tightly. The shares of the building materials supplier Martin Marietta Materials climbed by 2.6 percent, those of the construction unit manufacturer Vulcan Materials even by 3.3 percent.
The adhesive manufacturer HB Fuller did better than forecast in its second quarter. However, the company expects a higher increase in raw material costs than previously assumed. The share fell 2.8 percent.
Fuel advances in Alzheimer’s drugs
The papers of Eli Lilly even rose by up to 7.3 percent and were meanwhile more expensive than ever. On the basis of encouraging test results, the company wants to seek accelerated approval for its Alzheimer’s drug from the US health authorities. The FDA also rated the drug as groundbreaking.
In return, the titles broke from Biogenic by 6.1 percent. The company received FDA approval for its Alzheimer’s drug earlier this month. Various doctors and scientists had criticized the authority for this. Now competition is threatening, wrote the analysts of the brokerage house Guggenheim.
Fulminate stock market debut
It went better for Steelcase with a gain of 4.7 percent after the office supplier reported a 15 percent increase in sales. The result was also better than analysts had expected. KB Home missed the even higher consensus estimate despite a sales increase of 58 percent in the past quarter. That the profit was better than expected did not help, the price fell by 6.7 percent.
The technology company Confluent made a brilliant debut on the stock market. The operator of the streaming platform of the same name closed 25.1 percent above the issue price. The company was valued at $ 9.1 billion at an issue price of $ 36. Things went less well for the newcomer to the stock market Bright Health. The titles of the health insurance technology provider closed 7.6 percent below the issue price.
“Impressive quarterly result”
The shares of Accenture, which rose as much as 4.2 percent to a record high of $ 297.80. The IT consultancy has again presented an impressive quarterly result, praised analyst Surinder Thind from the investment bank Jefferies. The business is growing faster than expected. The raised full-year targets would also be above market expectations.
A disappointing quarterly sales brock Rite Aid on the other hand, the largest price slide in three months. The drugstore chain’s share fell at times by a good 15 percent. The proceeds reached $ 6.16 billion.
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