Tuesday, December 14, 2021
Wall Street in reverse
Inflation data is making US investors nervous
Wall Street continues the previous day’s losses. The reason for this is the Fed’s decision, which could lead to monetary tightening. And investors now seem to be getting cold feet after all.
The day before the eagerly awaited decision on US monetary policy, nervousness rises on Wall Street. The default values index Dow Jones fell 0.3 percent on Tuesday to 35,544 points. The broad S&P 500 (4634 points) and Nasdaq Composite (15,237 points) fell 0.7 and 1.1 percent, respectively.
The central bank Fed is expected to announce an accelerated throttling of its security purchases on Wednesday, said analyst Lukman Otunuga of the online broker FXTM. This stirs up speculation about premature rate hikes. “Investors see the probability of at least one rate hike by early May at 73 percent.” Such a step by mid-June at the latest is considered agreed. The unexpectedly strong rise in US producer prices encouraged stockbrokers in their expectation of a tightened monetary policy by the Fed. The path of least resistance will lead to a more aggressive tightening of US monetary policy in 2022, forecast investment strategist Michael Hewson from brokerage firm CMC Markets.
Against this background, investors mainly sold technology stocks. So the shares fell from Amazon, Apple, Netflix, the Facebook operator Meta and the Google parent Alphabet by up to 1.3 percent. According to experts, higher interest rates devalue future profits of these high-growth companies.
When it comes to cryptocurrencies, Elon Musk once again caused a stir. The announcement by the Tesla boss that his company will accept it in the future Dogecoin to pay for merchandising products, helped the crypto currency, which started as a parody of Bitcoin, to one Course plus from nearly 19 percent to $ 0.19. The decision is fueling speculation that Tesla will again accept Bitcoin as a means of payment for its electric vehicles in the future, said analyst Timo Emden from Emden Research.
On the other hand, things went down again for him Oil price. The US variety WTI fell by just under 1.1 percent to $ 70.48 per barrel (159 liters). Investors worried about a possible decline in demand because of the newly discovered Omikron variant of the corona virus, said stockbrokers. In addition, in the coming year the supply will exceed the demand because of the expanded OPEC production and the release of strategic reserves of several countries, predicted Commerzbank analyst Carsten Fritsch.
Belonged to the stock values Weibo to the biggest losers. China’s Twitter rival, listed on Wall Street, fell 3.5 percent after the Beijing government fined the company for violating cybersecurity law.
Because investors feared further pressure on companies with stock exchange listings in the USA, the electric car manufacturer’s papers were lost Nio and the search engine operator Baidu up to three percent. The shares of MGM resorts on the other hand rose by 2.2 percent. The casino operator is selling the Mirage Hotel in Las Vegas, where the magicians Siegfried & Roy had performed for decades, for $ 1.08 billion to Hard Rock International, the operator of the Hard Rock Cafes.
The papers of Terminix made a record jump of around 18 percent to $ 44.15. The British rival Rentokil wants to take over the exterminator for $ 55 per share or a total of $ 6.7 billion. According to his first calculations, the merger will increase net profit by 20 percent, commented analyst Kean Marden of the Jefferies investment bank. However, it will take several years for the acquisition to pay off.