Frankfort, New York A day ahead of the Fed’s expected rate hike, Wall Street is staying positive. The leading indices Dow Jones and S&P 500 each rose by around 1.5 percent on Tuesday through midday trading in New York – the Nasdaq can even gain around two percent.
In addition, stock market traders are preparing for the fact that the US Federal Reserve will raise the key interest rate by a quarter of a percentage point on Wednesday. “Anything else would be a surprise,” said Jens Franck, chief portfolio manager at asset manager NordIX. As a result, investors would put Fed Chair Jerome Powell’s subsequent comments on the gold scales. “In particular, new inflationary risks that have arisen as a result of the current geopolitical situation and risks for economic development are likely to be of importance.”
“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. That pushed yields on 10-year bonds down to 2.144 percent after they had risen to their highest levels in around three years at the start of the week.
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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. This also pushed down the prices of industrial metals such as copper and aluminum, which fell by 0.3 and 1 percent respectively. In their wake, shares in oil companies such as Exxon and Chevron each fell about five percent.
However, the worries are unfounded, since the government in Beijing has had successes in fighting the pandemic, said investment expert Ben Sheehan from the asset manager abrdn. “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 on the US stock market were American Airlines, Delta and United, whose stocks rose by seven 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: 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 one percent.
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