Wall Street news: US investors cautious ahead of Fed decision

New York Stock Exchange

Investors expect the Fed to raise rates soon.

(Photo: Reuters)

Frankfurt Before the upcoming decision by the US Federal Reserve, investors on Wall Street have taken cover. At the start of the week, worries about the consequences of the Omikron coronavirus variant put pressure on the buying mood. The Dow Jones index of standard values ​​closed 0.9 percent lower to 35,650 points. The technology-heavy Nasdaq was down 1.4 percent to 15,413 points. The broad S&P 500 lost 0.9 percent to 4668 points. In Europe, too, investors were wary of a number of central bank decisions.

“Everyone’s focused this week on the Fed and what guidance we’re getting on bond purchases and interest rates,” said Ryan Jacob, senior portfolio manager at the Jacob Internet Fund. “It is expected that the repatriation of the purchases will be accelerated and there is a certain amount of unrest in the run-up.” The decision of the US Federal Reserve is due on Wednesday. The decisions of the Bank of England and the European Central Bank will follow on Thursday.

At the beginning of the week, fear of another damper on the global economy as a result of the pandemic came to the fore. “The big unknown is still the Omicron variant and we don’t yet know how that will affect markets and the economy, but as long as that uncertainty persists, volatility is likely to remain higher,” said trading expert Randy Frederick at finance broker Charles Schwab.

According to the authorities, the rapidly spreading virus variant is already responsible for 40 percent of corona infections in London and at least one death in Great Britain. Against this backdrop, stocks from the travel and leisure sector in particular came under pressure. With a minus of 4.9 percent, Carnival shares were among the biggest losers in American cruise lines. American Airlines stocks slipped just under five percent. Fear of a renewed tightening of travel restrictions also pushed the European industry index down by 2.6 percent. Boeing’s papers at the Dow end sagged 3.7 percent. The shareholders of the cruise operator Royal Caribbean had to cope with a minus of 4.4 percent. Renewed tightening of the corona regulations would hit companies from these sectors hard again.

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Speculation of falling demand also put the oil price under pressure. As a result, the shares of energy companies fell. The headlines about the Omikron variant weighed on traders, confirmed David Madden, a market analyst at Equiti Capital.

US stock market expert Koch: “The expectations of the Fed meeting have long been priced in”

Look at further individual values

Arena / Pfizer: A takeover bid from competitor Pfizer, worth a total of 6.7 billion dollars, gave Arena the biggest price jump in the company’s history. The shares of the pharmaceutical company rose in the US trade at times by 90 percent. Pfizer is offering $ 100 per share in cash. In the end there was a premium of a good 80 percent. Pfizer shares rose 4.5 percent. For the group, it is the second billion-euro takeover within a short period of time.

Bristol-Myers Squibb: The pharmaceutical company Bristol-Myers Squibb wants to increase its dividend and also distribute billions to investors through a share buyback. With that, the shares among the biggest winners in the S&P 500 soared by 4.8 percent.

Moderna: After the previous losses, investors took hold of Moderna shares again and gave them a price increase of almost six percent.

Coke: At the top of the Dow, Coca-Cola shares rose 2.6 percent. Analyst Andrea Teixeira from the bank JPMorgan had previously set in a study on growth at the brewing company in the coming year. In addition, the strong brand suffered less from cost pressure and, on top of that, the papers were cheap.

Ford: Ford shares meanwhile lose almost five percent in the US business. Ford wants to triple production of its “Mustang Mach-E” model to 200,000 units per year by 2023. A total of 600,000 electric models are to be sold annually by then.

Harley-Davidson: The plan for the IPO of the electric motorcycle division brings Harley-Davidson a big jump in price. The shares rose at times by almost five percent. The company wants to bring the division to the stock exchange through a nearly $ 1.8 billion merger with an empty company shell.

Peloton: After the recent price slide in response to the latest episode of the TV series “Sex and the City”, investors are returning to Peloton. The shares gain more than six percent in the course of trading in the US business. On Friday they had slipped more than five percent because “Mr. Big ”- one of the main characters in the series – died of a heart attack after a training session on a peloton machine. This will hardly affect the sales figures, says analyst Simeon Siegel of the investment bank BMO. However, in the future the growth figures as at the beginning of the pandemic are no longer to be expected.

Game stop: Shares fell more than 14 percent at times after the video game retailer reported a larger loss last week than last year. The company also announced that the SEC had issued a subpoena in August to trade its shares. The Gamestop paper had slipped by more than 20 percent in the past four weeks.

Apple: Among technology stocks, Apple stocks initially continued their record run before the momentum subsided in the face of the weak overall market. In the early days of trading, the computer company almost cracked the $ 3 trillion mark for the first time in terms of market capitalization. The shares lost around two percent in the end.

Lucid Group: The shares rose by more than four percent in the course of trading. The electric vehicle maker recently announced an offer to buy convertible bonds worth $ 1.75 billion.

More: Twelve stocks that investors can use to invest in the future.

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