Frankfurt, New York Positive comments by the US Federal Reserve (Fed) on monetary policy gave Wall Street a boost on Wednesday. In addition, the agreement between the ailing real estate group China Evergrande and bondholders brightened investor sentiment. The US standard value index Dow Jones rose by one percent to 34,258.32 points. The broad S&P 500 and the tech-heavy Nasdaq both rallied at a similar rate.
The Fed signaled a reduction in its security purchases, but gave no details on the start and pace of so-called tapering. The official announcement is expected to follow at one of the two upcoming meetings, predicted investment strategist Tom Garretson from the asset management of the investment bank RBC.
“If progress continues broadly as expected, the Committee believes that a slowdown in bond purchases may soon be justified,” said the Federal Reserve. The economy was moving towards the goals of the central bank. Inflation has been high recently while the economy and labor market recovered from the corona pandemic.
The Fed’s statements were well received on the stock exchanges, wrote market observer Thomas Altmann from asset manager QC Partners. They met all expectations and did not contain any negative surprises.
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>> Read here the report on the Fed decision.
Investors reacted with relief to the announcement by the Chinese real estate giant Evergrande, with a total of 305 billion US dollars in debt, that they had found a solution for the interest payment due on Thursday for a yuan bond with a term until 2025 with the help of “private negotiations”. “But that doesn’t sound like a cash payment,” criticized analyst Chuanyo Zhou from research house Lucror. It remains unclear whether Evergrande will service the bond. According to the independent analyst Robin Bhar, the government in Beijing will not drop Evergrande. “It will not allow the economy to be disrupted.
Against this background, the Evergrande shares listed in Frankfurt closed 41 percent up at EUR 0.37. A relief rally could also be observed on the raw materials market. With a plus of up to four percent to 9335 dollars per ton, copper headed for the largest daily gain in more than half a year. The fear of an end to numerous construction projects in the event of a collapse of Evergrande had affected the metal required for power lines and water pipes in the past few days.
Investors also stocked up on crude oil. The US variety WTI rose by a good two percent to $ 71.98 per barrel (159 liters). The price driver is the growing global demand with simultaneously shrinking US inventories, said Andrew Lipow, head of the consulting firm Lipow Oil Associates. This helped oil companies like Exxon and Chevron to gain three percent each. “
Look at individual values
General Mills: In contrast, General Mills’ securities in the S&P 500 rose by a good three percent. As figures from the food company for the first quarter of the fiscal year showed, both sales and earnings were above expectations.
Sofi: The stock of the financial app SoFi rose more than eleven percent during trading after Jefferies introduced the papers with a buy rating and said the stock could rise more than 60 percent in the next twelve months. Jefferies expects Sofi’s business model to increase the number of users, product acceptance and margins.
US stock market expert Koch: “Wall Street recovers on quicksand”
Adobe: The papers from Adobe Systems lost a good three percent. The software company had failed to meet the high market expectations with its business figures.
Disney: Disney shares rose more than one percent at times after Credit Suisse said the Disney sell-off the day before was an overreaction and shares could rebound by more than 27 percent.
Fedex: Fedex shares fell a good nine percent to $ 229.08. This is the biggest daily loss since the stock market crash in March 2020. The parcel delivery company presented disappointing quarterly results and scaled back its business targets. Rising wage costs put pressure on margins, commented analyst Helane Becker from asset manager Cowen. The planned price increases could only partially compensate for this. Other companies also plagued with similar problems. The stocks of the Fedex rival UPS lost 2.3 percent.
Toast: Investors are scrambling for the toast of the stock market debutants. The shares of the supplier of software for restaurants rise twice by more than 50 percent to 60.50 dollars. The US company had allocated the paper for the nearly $ 870 million issue at $ 40 each and thus above the offer range of $ 34 to $ 36.
Netflix: In contrast, the titles from Netflix, which rose by a good three percent in price, were in demand. The online video store was bought by the Roald Dahl Story Company, which markets the author’s rights to books such as Charlie and the Chocolate Factory.
Freshworks: The enterprise software manufacturer Freshworks is making a leap in price to its debut on the Nasdaq. On the first day of trading, the shares rise to $ 43.50, which is well above the issue price of $ 36. That means the Salesforce rival is valued at $ 12.2 billion in total.
Facebook: Looking at technology stocks, Facebook’s shares fell by around four percent. The online network continues to struggle to adapt its advertising business to the increased privacy protection on the iPhone. The company was now trying to reassure its advertisers. The success of their ad campaigns has not slumped as much as incorrect Facebook data would suggest, according to a blog entry.
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