Business & Investment

Dow ends flat and S & P 500 and Nasdak snap a three-session skid after the minutes of the Federal Reserve Board show an upcoming tapering plan.

Minutes after the Federal Reserve’s last policy meeting, U.S. stocks traded near highs on Wednesday after growing expectations that the central bank would begin curtailing $ 120 billion in bond purchases a month by the end of the year. finished.

How did the stock index work?
  • Dow Jones Industrial Average

    Although it leveled off at 34,377.81, the losing streak was extended for four consecutive days.

  • S & P 500
    + 0.30%

    It rose 13.15 points (0.3%) and finished at 4,363.80.

  • Nasdaq Composite Index
    + 0.73%

    It rose 105.71 points (0.7%) and closed at 14,571.64.

on Tuesday, All three major indices fell, expanding the losing streak to the third session.

What has driven the market?

Dow Jones Industrial Average snapped three sessions of skids to make a profit after minutes of the Federal Reserve Board’s September meeting showed that the central bank could do it. Start tapering emergency asset purchases as early as November or December, Shows that the US economy has recovered significantly from the worst pandemic shock.

Some Fed officials have said that the central bank’s current Treasury and government mortgage-backed securities monthly purchases will be reduced at a faster pace of $ 120 billion than the proposed $ 15 billion reduction. Said he wanted.

However, benchmark Treasury yields were also low, putting pressure on bank stocks that would profit when yields were high, pushing up tech stocks. 10-year government bond

Investors were analyzing corporate profits in the third quarter of the United States as supply chain issues and concerns about labor shortages could weigh on corporate profits, dropping to 1.549%.

Wayne Wicker, Chief Investment Officer of the Company, said: MissionSquare Retirement said in a telephone interview.

“That’s why you see people upset now. You have different messages about whether the economy is making peak profits and whether inflation is eating up margins and reducing profits. I have, “he said.

“Not everything goes straight, so stock selection will be a more important factor in the fourth quarter.”

Wall Street has considered reading carefully watched over inflation that has become hotter than expected.

According to the data, the US consumer price index rose 0.3% in August and then 0.4% in September. The Ministry of Labor said on Wednesday. For the 12 months to September, the CPI rose 5.4% after rising 5.3% year-on-year in August.

look: Stronger than expected US inflation data includes bond traders assessing the risk of Fed policy errors

Excluding volatile food and energy components, the CPI rose 0.1% in August, then 0.2%, the lowest in six months. The so-called core CPI rose 4.0% year-on-year after rising 4.0% in August.

High food, gasoline and rent prices drove most of the progress. Economists surveyed by The Wall Street Journal predicted a 03% increase in the CPI.

Nancy Davis, founder of Quadratic Capital Management, commented in an email Wednesday.

Companies are increasingly mentioning the impact of price pressure on earnings updates, and investors are enthusiastic about guidance from C-suite executives on the outlook for inflation.

JP Morgan Chase

The results were better than Wall Street’s forecast for earnings per share It also released an allowance for doubtful accounts of $ 2.1 billion. However, its share fell 2.6%.

Conversely, if another major bank announces an allowance for doubtful accounts, it’s a bullish sign of the health of the US economy, Wicker said.

“I think this pattern shows that the coast is pretty clear,” he said. “I didn’t really experience the bad debt that I had to prepare a year and a half ago.”

read: Will the wild rally of bank stocks continue?Here are some notable numbers for this week’s earnings:

Analysts expect S & P 500 Index revenue to grow by 27.6% each year. The pace is extremely slow It exceeded the 52.8% increase in the first quarter and the 92.4% increase in the second quarter. Both benefited from a good comparison with the launch of the COVID-19 pandemic last year.Bank of America warns: Guidance from companies can be ugly In “Make or Break Quarter”.

opinion: Even if you know the S & P 500’s earnings earlier than anyone else, it will still be difficult to beat the market.

Despite Wednesday’s inflation data, Fed officials are unlikely to change their view of tapering and will eventually close their purchases by mid-2022 as they are ready to normalize interest rates. He said he was likely to.

“The Fed is already expected to announce a tapering plan, and central banks are likely to want to maintain options in their hiking cycles,” said Davis of Quadratic.

Which company was the focus on?
How were other assets traded?
  • ICE USD Index
    Currency readings against the baskets of the six major rivals fell 0.5%.

  • U.S. oil futures lose momentum in benchmarks

    Close 0.3% and settle for $ 80.44 a barrel.Gold futures
    + 1.97%

    Closed 2% higher to settle for $ 1,794.70 an ounce.

  • Stocks Europe 600
    + 0.70%

    London’s FTSE 100 closed 0.7% higher
    + 0.16%

    It increased by 0.2%.

  • Shanghai Composite
    + 0.42%

    Japan’s Nikkei 225 rose 0.4%

    Lost 0.3%.

Barbara Kollmeyer contributed to the report

Dow ends flat and S & P 500 and Nasdak snap a three-session skid after the minutes of the Federal Reserve Board show an upcoming tapering plan. Dow ends flat and S & P 500 and Nasdak snap a three-session skid after the minutes of the Federal Reserve Board show an upcoming tapering plan.

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