Investors expect the Fed to raise rates soon.
(Photo: Reuters)
Frankfurt In anticipation of the Fed’s decision on monetary policy, investors only touch US stocks with the tips of their fingers. The Dow Jones standard value index was just up on Wednesday at 35,553 points. The broad S&P 500 and the technology-heavy Nasdaq lost up to 0.9 percent.
“It is widely expected that the US Federal Reserve will announce an increased pace of curbing its asset purchases,” said analyst Ricardo Evangelista of the brokerage firm ActivTrades. This will fuel speculation that a first rate hike will come earlier than previously thought.
“If the Fed announces accelerated tapering, prices could still rise,” said Kim Forrest, chief investor at asset manager Bokeh. Because this would be a sign that the central bank is taking control. “People like it when there is action.” Fed Chairman Jerome Powell will also emphasize that his house will only raise interest rates very cautiously.
With this in mind, the Fed executives’ interest rate forecasts are particularly interesting, interjected David Riley, chief investment strategist at asset manager BlueBay. Investors would check the so-called “dot plots” for possible more aggressive interest rate hikes in 2023. Experts expect at least two steps of a quarter of a percentage point each in 2022.
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Meanwhile, prices on the crude oil market fell. The US variety WTI fell 0.3 percent to $ 70.50 per barrel (159 liters). The oversupply forecast by the International Energy Agency IEA for 2022 depresses the mood, said Commerzbank analyst Carsten Fritsch. “OPEC + will therefore have little choice but to rethink its plans to expand production.”
Look at further individual values
Chinese stocks listed on Wall Street came under selling pressure. According to the “Financial Times”, several technology companies are to be blacklisted by the US government because of their alleged involvement in the surveillance of the Uighur minority in China. Against this backdrop, the listed iShares fund (ETF) on Chinese stocks fell by almost four percent to a year and a half low of $ 61.71.
Eli Lilly: The pharmaceutical company’s shares rose more than four percent. Thanks in part to a government contract to supply corona drugs, Eli Lilly raised the profit target for 2021 to 8.15 to 8.20 from 7.95 to 8.05 dollars per share. The turnover will be 28 to 28.3 instead of 27.2 to 27.6 billion dollars. For 2022, the company was forecasting a surprisingly high surplus of $ 8.50 to $ 8.65 per share.
Vir Biotechnology: Encouraging test results for a coronavirus drug encourage investors to get started. The drug company’s shares rose more than ten percent on Wall Street. The preliminary data indicated that the drug could neutralize the Omikron variant and, unlike competing products, would not lose its effectiveness in the fight against this mutant, says analyst Phil Nadeau of asset manager Cowen.
Domino’s Pizza: The shares fell 0.8 percent. The British bank Barclays had downgraded the share from “equally weighted” to “underweighted”. Solid fundamentals and stronger headwinds for competitions would have helped Domino’s outperform during the pandemic. For the analysts, however, this headwind for the competition is now easing.
United Parcel Service: The major Swiss bank UBS rated the delivery service’s share as a “top pick”. UPS is likely to benefit from rising consumer spending and has greater opportunities to expand margins than its competitors. UPS stocks rose more than one percent.
Six flags: The shares of the amusement park operator rose by around four percent. The US bank Goldman Sachs had upgraded the share from “neutral” to “buy”, highlighting the robust ticket prices and the conservative forecast by Six Flags.
More: Twelve stocks that investors can use to invest in the future.