UPS causes a stir
Rate hikes dampen Wall Street sentiment
02/01/2022, 10:31 p.m
The interest rate hikes planned by the US Federal Reserve are dampening the buying mood of US investors. The upcoming deliberations of the major exporting countries are causing tension on the oil market. The telecom group AT&T, on the other hand, is struggling with a decent price loss.
After the recent price gains, US investors are less willing to buy. The US Standard Value Index Dow Jones increased by 0.74 percent and was almost unchanged on Tuesday at 35,403.86 points. The broad one S&P 500 With 4,546.45 points, he also barely made any progress. Even the technology-heavy one Nasdaq increased by only 0.60 percent to 15,019.68 points. Because of the planned interest rate hikes by the Federal Reserve, it will be more difficult for Wall Street to resume the hunt for records, said investment strategist Anu Gaggar from the brokerage house Commonwealth Financial Network. “Markets will be off steroids and may be going through a period of withdrawal.”
“A few months ago, everyone thought the Federal Reserve would be relatively patient when it came to inflation,” said John Flahive, manager at asset manager BNY Mellon. Investors originally expected three or four rate hikes this year. It’s four or five now. “So everyone’s getting a little nervous.”
Dollar and oil prices under pressure
the dollar index, which tracks the rate against major currencies, failed to continue its rally, falling 0.26 percent. Fed bankers have taken the wind out of speculation that US interest rates will rise by half a percentage point instead of a quarter in March, said analyst Ricardo Evangelista of brokerage house ActivTrades.
On the crude oil market, investors also cashed in on the day before the major exporting countries discussed their production volumes. The US variety STI was $88.33 per barrel (159 liters). Against the background of the recent price rally and the probable pressure from the importing countries, “Opec+”, which includes the members of the export cartel and other producing countries such as Russia, could this time increase quotas by more than the usual 400,000 barrels per day, the analysts predicted Bank Goldman Sachs. According to insiders, an Opec+ committee did not discuss this option in preparatory talks.
AT&T cuts dividend in half
Worried about the stock values UPS cause a stir. Shares of the package delivery company rose 14 percent to a high of $230.52 and faced the biggest one-day gain in company history. The quarterly results exceeded their expectations, praised analyst Helane Becker from asset manager Cowen. The same applies to the increased dividend. In the slipstream of UPS, the rival’s titles win FedEx 2.82 percent. Also the German postal service increases by 1.68 percent.
For the titles of AT&T on the other hand, it went down by 4.27 percent. The telecom group is splitting its media division as part of a $43 billion deal WarnerMediawhich includes the news channel CNN and the pay-TV broadcaster HBO, and merges them with the TV group Discovery. AT&T wants to use the deal to reduce its mountain of debt. Against this background, the dividend will also be halved.
However, AT&T must invest heavily in its mobile and fiber optic networks, warned analyst Barry Sine from financial services provider Spartan. These have been neglected in recent years because money was needed to set up the HBO Max streaming service. As a latecomer, it will be difficult for the company to snatch market share from rivals.