Investors expect the Fed to raise rates soon.
(Photo: Reuters)
Frankfurt, New York The Dow Jones Industrial ended a week dominated by monetary policy in the red on Friday. While the US benchmark index had risen significantly in the middle of the week, skepticism has prevailed again recently. Investors are unsettled because more and more central banks are taking their foot off the accelerator or even starting to apply the brakes. The background to this is the high and rising inflation in many places, which has long been dismissed as a temporary matter.
The Dow lost 1.48 percent to 35,365 points. On a weekly basis, this results in a decrease of 1.68 percent. The market-wide S&P 500 fell on Friday by 1.03 percent to 4620 meters. The technology-oriented Nasdaq 100 fell 0.39 percent to 15,801 points.
Institutional investors were doing balance sheet cosmetics at the end of the last full trading week of the year, said Peter Cardillo, chief economist at Spartan’s financial advisor. Some parted ways with holdings for tax reasons. “The general mood at the turn of the year is good, but everything depends on the economic outlook.”
The US Federal Reserve expects the world’s largest economy to grow robustly in 2022 and therefore plans to raise interest rates three times in the coming months.
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At the same time, a lack of confidence in Turkish economic policy broke the listed iShares fund (ETF) on stocks from this country in one of the biggest price falls in its history. It fell at times by almost 15 percent to a record low of $ 16.97. The decline in the Turkish currency, which has lost more than half of its value since the beginning of the year, also continued unabated. The dollar hit a record high for the third day in a row at 17.066 lira.
President Recep Tayyip Erdogan will apparently not be dissuaded from his course of keeping interest rates low despite high inflation, said financial expert Patrick Curran from research house Tellimer. This threatens to worsen the currency crisis to a point where there is no going back. “As long as Erdogan is in charge, nothing will stop the devaluation of the lira.”
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FedEx: FedEx is more optimistic about the future. The parcel delivery company is returning to its original business goals, although staff shortages and the resulting additional costs have reduced margins. The earning power is still slightly above expectations, praised analyst Matthew Young from the research company Morningstar. The growth was even 14 percent above his forecasts. FedEx shares then rose by up to 9.2 percent, as strong as last year and a half. Rival UPS won 0.4 percent.
AMC: Also in demand were the papers of the cinema operator AMC, which rose by 19.05 percent. According to the company, over a million visitors flocked to its US theaters to see the new film “Spider-Man: No Way Home”. This is the biggest rush since the beginning of 2021. Only “Avengers: Endgame” earned more money on the day of the cinema premiere. AMC also operates numerous movie theaters in Germany.
US stock market expert Koch: “The mood on Wall Street is increasingly clouding over”
Oracle: The shares of Oracle fell against it by more than six percent. According to the “Wall Street Journal”, the SAP rival wants to buy the IT service provider Cerner for 30 billion dollars. Compared to other acquisitions in the sector, the price is more than fair, said analyst Charles Rhyee of asset manager Cowen. It also makes strategic sense. Cerner titles rose at times by a good 16 percent to a record high of 92.34 dollars. This is the biggest price jump in nine years.
Rivian: The electric vehicle maker posted a loss of $ 1.23 billion in the third quarter. The reason for this was the cost of starting production of the electric pickup truck. In Rivian’s first quarterly report since going public, income from initial sales was $ 1 million. The share collapsed by a good ten percent.
Novavax: The shares of the drug manufacturer rose by more than ten percent. The European Medicines Agency may approve the Covid-19 vaccine for emergency use as early as next week, according to the Financial Times.
US Steel: The steelmaker’s share fell 1.58 percent after the company released a forecast for the current quarter that was below expectations. Higher spending and cautious buying behavior were the reasons the stock fell despite improved steel prices.
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