Frankfurt The monetary policy decisions of the US Federal Reserve, which were received with relief, and encouraging company balance sheets are giving Wall Street renewed tailwind. The leading indices Nasdaq and S&P 500 rose to record highs on Thursday. The Nasdaq closed 0.8 percent higher at 15,940 points, the S&P improved 0.4 percent to 4680 points. Only the Dow Jones initially missed a new record. It crumbled by 0.1 percent to 36,124 meters.
“We are still optimistic about corporate earnings,” said Bob Sechan, co-founder of asset manager New Edge. “They will develop strongly across the board.” Finally, the coronavirus pandemic has passed its peak and the economy is normalizing in full swing.
Against this background, the US Federal Reserve is reducing the volume of its securities purchases, as expected. At the same time, Fed Chairman Jerome Powell dampened speculation that interest rate hikes would be imminent. “Powell confirmed once again that this measure is a step towards normalizing monetary policy and does not necessarily reflect a restrictive attitude,” said Achim Stranz, chief investor at the asset manager Axa Investment Managers.
As expected, the Fed is taking its foot off the gas, noted capital market strategist Jürgen Molnar of Robo Markets. The key interest rate will remain unaffected, something should not happen here until mid-2022 at the earliest. “So the green light from monetary policy,” said the expert. In combination with a convincing reporting season, there are currently no braking factors.
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In addition, the Bank of England did not raise its key rate on Thursday despite speculation to the contrary. Together with the Fed’s conclusion, this put a strain on stocks from the banking sector, where it is generally said that higher interest rates would be beneficial for day-to-day business, for example with loans. Goldman Sachs shares fell 2.4 percent on the Dow and JPMorgan shares fell 1.3 percent.
Nevertheless, the dollar index, which reflects the exchange rate against major currencies, rose by 0.5 percent. Apparently, investors used the previous price losses to get started, said investment strategist Kit Juckes from Bank Société Générale. Investors also took hold of US Treasuries. This pushed the yield on trend-setting ten-year Treasuries down to 1.512 percent.
Meanwhile, the oil price went on a roller coaster ride. On the one hand, “Opec +”, which includes the members of the export cartel and other producing countries such as Russia, does not give in to international pressure for a more rapid expansion of production and continues to increase the quotas by 400,000 barrels per day per month. On the other hand, the Al Arabiya broadcaster reported that Saudi Arabia’s oil production will exceed ten million barrels a day for the first time since the outbreak of the coronavirus pandemic. In the evening, the US oil type WTI was down two percent at $ 79.22 per barrel (159 liters).
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Qualcomm: Qualcomm was one of the favorites on the US stock market. The title of the mobile phone chip specialist jumped almost 13 percent after a quarterly result above market expectations. The company is benefiting from the sales success of smartphones with the new 5G mobile communications standard, commented analyst Abhinav Davuluri from the research company Morningstar. He therefore also expects record results in 2022.
Nvidia: The rally in the tech sector extended to the entire chip industry in the wake of the Fed decision and Qualcomm’s outlook. The papers from Nvidia were conspicuous with their ongoing record hunt. They really gained momentum again with a course jump of twelve percent. With a market valuation of around 750 billion US dollars, the chip company is heading towards the trillion threshold.
EA: Electronic Arts (EA) also delighted investors with its numbers. Thanks to the success of “Fifa”, the video game provider raised its annual targets. Many players switched from the 2021 version of the soccer simulation to the 2022, commented analyst Andrew Uerkwitz of the Jefferies investment bank. In addition, the fighting game “Apex Legends” continues to enjoy great popularity. EA papers rose in price by 2.1 percent.
Nikola: Otherwise, there were strong price gains in the small and mid-cap segment at the electric truck builder Nikola after a surprisingly good quarterly report. The usually volatile papers expanded their plus to 21 percent. The company also agreed to a $ 125 million fine to settle SEC investigations into company founder Trevor Milton.
Viacom CBS: The share fell 1.6 percent. The company had exceeded estimates with its quarterly results, and sales were also better than expected. Results in both the streaming and TV businesses were strong.
Moderna: Moderna shares collapsed by almost 18 percent. The biotech company is not keeping up with the production of its coronavirus vaccine and has therefore lowered its sales targets for the serum.
Merck & Co: The papers from Merck & Co, which rose by a good two percent, were also in demand. Great Britain was the first country to approve the pharmaceutical company’s coronavirus drug.
MGM Resorts: Shares rose 0.6 percent on the stock market after the company announced it would sell its Mirage casino operations in Las Vegas to another operator. However, MGM said it had not yet reached a sales agreement and did not provide names of potential buyers.
Nerd wallet: Nerdwallet’s shares can nearly double their price on their US stock market debut. They’re up more than 90 percent to $ 34.44. In the $ 130.5 million issue, the California-based online financial advisor’s papers were issued at $ 18 each.
More: 15 stocks with market power: who sets the prices in times of inflation.