Wednesday, May 18

ROUNDUP/New York shares Conclusion: Dow turns negative after Powell statements

NEW YORK (dpa-AFX) – According to statements by US Federal Reserve Chairman Jerome Powell on future monetary policy, US stock markets stumbled on Wednesday. Concern that monetary policy tightening could be even quicker than expected this year caused turbulence on the markets, which had recovered significantly at times. The interest rate decision itself met expectations and initially left the markets cold.

As expected, there will probably be a first rate hike in March. However, the markets came under pressure due to fears that there could be more interest rate hikes in 2022 than the four already priced in. When asked, Powell did not rule out raising interest rates at each of the coming meetings. Including March, the Fed is scheduled to meet seven times this year.

The rollercoaster ride on the US stock exchanges entered the next round this week. After a peak gain of 1.5 percent, the Dow Jones Industrial (Dow Jones 30 Industrial) ultimately lost 0.38 percent to 34,168.09 points. The broad-based S&P 500 fell 0.15 percent to 4349.93 points.

However, the technology stocks, which have recently been particularly heavily penalized, managed to salvage a small profit in the final chord. Based on pleasing figures from Microsoft, among others, the NASDAQ 100 rose by 0.17 percent to 14,172.76 points. At the top he had previously gained well over three percent.

“Powell’s comments from the press conference are received much worse on the floor than the actual Fed statement,” said market observer Thomas Altmann from asset manager QC Partners. In view of the remaining meetings this year, the currency keeper made the Brsians sit up and take notice. Altmann reckons that market expectations will then be closer to five rate hikes than four.

Microsoft stock dominated the Dow, finishing up 2.9 percent. Analysts praised the software giant’s figures, which after days of falling prices in the technology sector again set a more positive scent for this industry. Analyst Kirk Materne from the analysis company Evercore ISI emphasized an optimistic group forecast for the cloud platform Azure in the current business quarter.

The same was true for the Nasdaq representative Texas Instruments, whose shares ultimately rose by 2.5 percent. The chip group had also presented strong quarterly figures and surprised the group of experts with an optimistic view of the future. Tesla also moved into the Nasdaq focus with a recovery of 2.1 percent ahead of the electric car maker’s upcoming results.

However, Boeing (Boeing) did not join this positive series, the papers of the aircraft manufacturer went down with 4.8 percent. The corona crisis and problems with the long-haul jet 787 “Dreamliner” caused the aircraft manufacturer to lose another billion in 2021.

The titles of the telecom giant AT&T even dropped by 8.4 percent according to its quarterly figures. According to analysts, in the fourth quarter the increased advertising expenditure was reflected in a high increase in customers with disappointing profitability.

The toy manufacturer Mattel, meanwhile, made a positive impression by achieving a price increase of 4.3 percent. He has regained a coveted license to produce Disney toys, including characters based on the Frozen films. The rights were lost to rival Hasbro in 2016, which is now back on the hook. Its papers came under pressure at 6.1 percent.

According to Powell’s statements, the euro fell to its lowest level since the pre-Christmas period. Most recently, the common currency cost 1.1240 US dollars. The European Central Bank (ECB) had previously set the reference rate at 1.1277 (Tuesday: 1.1268) US dollars. The dollar thus cost 0.8868 (0.8875) euros.

US Treasury bond prices also fell. The futures contract for ten-year Treasuries recently lost 0.66 percent to 127.28 points. In return, the yield on ten-year government bonds rose to 1.88 percent and thus in the direction of its recently reached two-year high./tih/he

— By Timo Hausdorf, dpa-AFX —