Monday, December 4

Wall Street arrives higher after Tuesday’s sell-off

At the opening of Wall Street, real estate developers are listed with declines after KeyBanc downgraded the sector on concerns about impending interest rate hikes that will drive up mortgage costs.

The US bank Bank of America recorded a net profit of 31,978 million dollars (28,200 million euros) in 2021, for which its profits experienced an increase of 78.7% compared to those of the previous year, according to the income statement published this Wednesday by the financial institution.

The large change in profit is due to the impact at the accounting level of the provisions to deal with loan defaults. In 2020 as a whole, the bank set aside 11,320 million (9,983 million euros), which had a negative impact on the accounts. However, the good performance of the economy and a lower than expected level of credit losses led Bank of America to release a total of 4,594 million (4,051 million euros) of its reserves during 2021. This release of provisions has had a positive effect on the income statement. Bank of America shares appreciate 2.69%.

Morgan Stanley recorded a profit of 15,034 million dollars (13,250 million euros) in the whole of 2021, which represents an increase of 37% compared to the previous year, as reported this Wednesday. The entity’s income expanded by 23% last year, to a record 59,755 million dollars (52,666 million euros). Of that figure, net interest income grew 27%, to 8,045 million (7,091 million euros), while billing for asset management was 19,967 million (17,598 million euros), 40% more. Morgan Stanley notes an increase of 2.49%.

The American giant of consumer and hygiene products Procter & Gamble (P&G) registered an attributed net profit of 4,223 million dollars (3,713 million euros) between the months of October and December 2021, the second fiscal quarter for the manufacturer of the Ariel detergent or Gillette razors, which represents an improvement of 9.6% compared to the result of the same period of 2020. P&G rises 3.96% at the open.

Unitedhealth presented its profit for the fourth quarter of the year on Wednesday, figures that exceeded analysts’ forecasts. Income, meanwhile, was higher than expected. UnitedHealth Group notes an increase of 2.97% at the opening.

Wall Street closed lower on Tuesday with its main gauge, the DOW JONES Ind Average, down 1.51% in anticipation of several interest rate hikes this year.

According to data at the end of the session on the New York Stock Exchange, the DOW JONES Ind Average fell 543.34 points, to 35,368.47 units, while the selective S&P 500 fell 1.84% or 85.74 integers, to 4,577.11 points.

The NASDAQ 100 composite index, which brings together the most important technology companies, fell by a remarkable 2.60% or 386.86 units, to 14,506.90 integers, weighed down by the technology sector.

After the long weekend for the holiday in honor of Martin Luther King, New York’s trading floor was dominated by risk aversion and investors decidedly bet on sales.

According to analysts, the market is preparing for a more aggressive adjustment than anticipated in monetary policy by the Federal Reserve, which is generating movements in the debt market.

The US central bank has said it will prioritize fighting inflation, which has grown at its fastest rate in nearly 40 years at 7%, and is expected to raise rates at least three or four times.

The yields of 10-year Treasury bond exceeded 1.87% at the close of this Tuesday, a level not seen since January 2020, prior to the covid-19 pandemic. This Wednesday, Treasury bonds rise again, with the two-year bond at 1.06% and the reference 10-year Treasury bond reaching 1.89%.

Goldman Sachs fell 7% after reporting record annual results but disappointing in the fourth quarter, in which profits have fallen mainly due to higher expenses.

Video game developer Activision Blizzard was also in the news, shooting up 26% after Microsoft announced its purchase for $69 billion. The shares of the Japanese electronics and entertainment giant Sony, owner of PlayStation, have fallen 12.79% on the Tokyo Stock Exchange this Wednesday, after yesterday the agreement was known by which Microsoft, owner of Xbox, will buy the video game developer Activision Blizzard for 68.7 billion dollars (60.326 million euros).

By sectors, the most affected were technology (-2.49%), financial (-2.3%) and communications (-1.99%).

This Wednesday you also present your accounts to the US Bancorp bank and the airline United Airlines. Of the 33 S&P 500 companies that reported quarterly results, nearly 70% beat Wall Street expectations.