Frankfort, New York A day before the Fed’s expected interest rate hike, investors stock up on US stocks. They hoped for a ceasefire in Ukraine and reacted with relief to the easing of price pressure from falling energy prices. However, they were concerned about the flare-up of the coronavirus pandemic in China.
The US standard value index Dow Jones closed 1.8 percent higher on Tuesday at 33,544 points. The tech-heavy Nasdaq advanced 2.9 percent to 12,948 points. The broad S&P 500 gained 2.1 percent to 4262 points.
The stock market is certain that the Fed will raise the key rate by a quarter of a percentage point on Wednesday. “We’ve been talking about rate hikes for about a year,” said Christopher Grisanti, chief investment strategist at wealth manager MAI. “It’s good for the market that it’s finally coming and that we’re getting it over with.” He hopes that the central bankers will signal a cautious tightening of monetary policy for the coming months, despite all the concerns about inflation.
Against this backdrop, the dollar index, which tracks rates against major currencies, was little changed at 99.092 points, while selling pressure eased in the bond market. This pushed the yield on ten-year bonds down to 2.144 percent.
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Even if no ceasefire is in sight in the war in Ukraine, there was still hope for a diplomatic solution. The talks have become “more constructive,” said Ukrainian presidential adviser Ihor Zhovkva on Tuesday, according to the Unian agency. However, there was also a statement by Russian President Vladimir Putin that Ukraine was not seriously looking for a mutually acceptable solution in the ongoing negotiations.
US economic data confirmed the high inflationary pressure: In February, producer prices rose by ten percent compared to the same month last year. However, it was said that in addition to the oil price, a surprisingly gloomy mood in industrial companies in the US state of New York had somewhat alleviated fears that the Fed would tighten its pace of tightening in the future.
Meanwhile, the price of US crude oil slipped 6.4 percent to $ 96.41 per barrel (159 liters). The strict pandemic restrictions in some of China’s economic hubs fueled investors’ fears of a drop in demand. In their wake, shares in oil companies such as Exxon and Chevron each fell about five percent.
However, investment expert Ben Sheehan from asset manager Abrdn pointed out that the worries are unfounded, since the government in Beijing has had successes in fighting the pandemic. “While consumption has faced headwinds from the ongoing lockdown measures, industrial activity has remained resilient and China has maintained its role as a reliable partner in global trade.”
US stock market expert Koch: “Much pessimism on Wall Street”
Look at other individual values
Airlines: Among the favorites in the US stock market were American Airlines, Delta and United, whose stocks were each up about nine percent. Some airlines had raised their revenue forecasts thanks to robust demand. This offsets higher fuel prices, wrote analyst Sheila Kahyaoglu of investment bank Jefferies. In addition, she trusts Delta in particular to be able to pass on higher costs to customers.
AMC: In addition, AMC moved into the limelight. The world’s largest cinema chain, which operates numerous cinemas in Germany, is acquiring a stake in the gold mine operator Hycroft. This brings his papers a jump in price of up to 96 percent to $ 2.72. According to the information, AMC takes over about 22 percent of the Hycroft shares for about 28 million dollars. AMC could not initially be reached for a comment on the reasons for this investment. AMC shares were up about seven percent.
consumer stocks: In addition to the up to 3.9 percent higher technology stocks Apple and Microsoft, consumer stocks were also a support in the Dow. At the top of the index were the titles of the media group Walt Disney with a four percent increase. The papers of the consumer goods group Procter & Gamble and the fast food chain McDonald’s increased up to 3.6 percent.
Chip Values: On the Nasdaq, chip values recovered with an increase of 7.7 percent, for example at Nvidia.
Peloton: The price gains at the fitness specialist Peloton were even greater there, with a price jump of 12 percent. The US analysis company Bernstein is optimistic about the papers that have recently fallen out of favor with investors in an initial assessment. According to analyst Aneesha Sherman, the time has come to get back on track.
Coupa software: In the second-line stocks area, the shares of Coupa Software were otherwise negative with a price slump of 19 percent. The company, which specializes in solutions for purchasing and procurement controlling, disappointed with its outlook.
Moderna: Moderna shares fall after a sharp rise in Covid-19 cases in China. They are down 2.1 percent.
Alibaba: Alibaba shares are surprisingly up, up 1.3 percent. The shares have lost more than 27 percent in the last nine trading sessions. The Chinese e-commerce giant is currently under pressure, both amid fears of a Covid-related economic slowdown in China and the threat of a possible US delisting.
vimeo: Vimeo announced that its February revenue increased 23 percent year-over-year. As a result, the shares rose by around two percent.
More: Buy, sell or sit out? How investment professionals position themselves in times of crisis