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NEW YORK (Dow Jones) – At the beginning of the new week, the US stock markets rose significantly again. The Dow Jones index rose 0.9 percent shortly after the start of trading. The S&P 500 index rose by 0.7 percent and the Nasdaq Composite by 0.9 percent. Diminishing fears of rate hikes that helped Wall Street on Friday continue to support prices, traders say. Investors are less concerned that the US Federal Reserve will raise rates by 100bp at its next meeting.
Last week, surprisingly strong increases in consumer and producer prices fueled the corresponding speculation. Since then, however, several Federal Reserve officials have tried to calm the situation. Most of the market is now expecting another 75-point hike in interest rates.
There are no important economic data on Monday. To that end, investors are confronted with certain quarterly reports from major companies, including post-market IBM business data.
Two other major US banks, Bank of America and Goldman Sachs, reported the progress of the second quarter. While Goldman saw profits drop sharply for the quarter, it still outperformed expectations. Shares rose 5.3 percent. Profits in Bank of America (+ 3.2%) also declined significantly and also fell short of analysts’ expectations. Equities are likely to benefit from improved sentiment in the sector; banking index increases by 2.6 percent.
Alphabet shares rose 0.3 percent. The 1:20 share split will come into effect on Monday. Aircraft orders from Delta Air Lines and Japan’s ANA helped boost Boeing’s shares by 4.2 percent.
The impending energy crisis in Europe is driving up oil prices
Away from the USMonetary policy and the clearing season is the European Central Bank’s interest rate meeting, which is likely to be the first rate hike According to Deutsche Bank, the looming energy crisis in Europe has been the key issues on Wall Street since 2011. The market eagerly awaits whether Russian gas will return to Europe via the Nord Stream 1 pipeline, which is currently being shut down for maintenance.
In the oil market, players are betting the pipeline will not restart as scheduled on Thursday. Bets on an oil supply that cannot keep up with rising demand lead to higher oil prices.
Declining speculation on the Fed’s 100bp rate hike causes the dollar to weaken slightly. The dollar index fell by 0.6 percent. In the case of the euro, the situation improved somewhat. The single currency is torn between tensions between the ECB’s interest rate hike on Thursday, which the majority deemed too low, and speculation about a possible larger interest rate hike. According to Saxo Bank strategists, an interest rate hike of 25 basis points would be a move that is “too small and too late”. Meanwhile, Julius Br said the ECB may raise interest rates by more than expected 25 basis points, which should strengthen the euro. Possible euro gains against the dollar will likely be limited in the near term, however, as recession fears support a safe haven, the market is counting on further aggressive interest rate hikes by the US Federal Reserve and Eurozone had to contend with higher energy prices.
Meanwhile, government bonds are not in demand and investors are again willing to take risks. Falling prices increase profitability. However, the yield curve is still clearly inverted, which is interpreted as a signal of a recession.
INDEX last + / -% absolute + / -% YTD
DJIA 31 564.44 + 0.9% 276.18 -13.1%
S&P 500 3 889.70 + 0.7% 26.54 -18.4%
Nasdaq Comp. 11 552.35 + 0.9% 99.93 -26.2%
Nasdaq-100 12,072.48 + 0.7% 88.86 -26.0%
Term Profitability Bp to VT Profitability VT +/- Bp YTD
2 years 3.17 +4.2 3.12 243.6
5 years 3.10 +5.1 3.05 183.7
7 years 3.08 +6.3 3.01 163.6
10 years 2.98 +6.5 2.92 147.2
30 years old 3.15 +6.7 3.08 124.6
FOREX last +/-% Mon, 8:30 Fri, 17:34% YTD
EUR / USD 1.0144 + 0.6% 1.0089 1.0091 -10.8%
EUR / JPY 140.26 + 0.4% 139.48 139.81 + 7.2%
EUR / CHF 0.9910 + 0.6% 0.9846 0.9869 -4.5%
EUR / GBP 0.8463 -0.4% 0.8489 0.8507 + 0.7%
USD / JPY 138.26 -0.2% 138.25 138.53 + 20.1%
GBP / USD 1.1985 + 1.0% 1.1887 1.1865 -11.4%
USD / CNH (offshore) 6.7497 -0.2% 6.7549 6.7666 + 6.2%
BTC / USD 22 106.75 + 5.2% 21 954.74 20 855.24 -52.2%
ROHL last VT-Settl. +/-% +/- USD% YTD
WTI / Nymex 101.69 97.59 + 4.2% 4.10 + 40.9%
Brent / ICE 105.77 101.16 + 4.6% 4.61 + 41.2%
GAS VT close +/- EUR
Dutch TTF 157.56 160.80 -1.3% -2.01 + 35.2%
METALS last day before +/-% +/- USD% YTD
Gold (spot) 1,717.53 1,770.70 + 0.6% +9.83 -6.1%
Silver (Spot) 18.92 18.70 + 1.2% +0.22 -18.8%
Platinum (spot) 868.30 848.75 + 2.3% +19.55 -10.5%
The future of copper 3.31 3.23 + 2.5% +0.08 -25.4%
YTD at the end of the day
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(END) Dow Jones Newswires
July 18, 2022 09:46 ET (13:46 GMT)
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