Powell brightens the mood
Wall Street is recovering strongly
05/13/2022 10:22 p.m
The US stock markets are back on course for recovery. This is mainly due to the statements by Fed Chair Powell. On the other hand, Tesla boss Musk, who is putting his billion-dollar takeover of Twitter on hold, is causing a stir. Shares plunge 9.6 percent.
After a long dry spell with some shaky signs of stabilization, Wall Street has been able to recover. US Federal Reserve Governor Jerome Powell provided the mood lift at the end of the week. While Powell wouldn’t rule out a “big” 75 basis point rate hike that the market feared, he did appease by saying, “I said we’re not actively considering that.”
Of the Dow Jones Index gained 1.5 percent to 32,197 points that S&P 500 rose 2.4 percent and the Nasdaq Composite by 3.8 percent. A total of 2,672 (Thursday: 1,530) course winners and 680 (1,860) losers were counted on the Nyse, 97 (87) titles closed unchanged.
However, traders spoke of unabated concerns about the current economic development, the market environment with fears of stagflation remained negative, it said. The Nasdaq alone posted losses of 6.3 percent from Monday to Thursday, but also recovered particularly strongly towards the end of the week.
According to Powell and the already published consumer and producer inflation data, import and export prices became less important. The recent trend of weakening inflationary pressures has been confirmed by the new data. Meanwhile, consumer sentiment clouded over more than expected.
Musk crashes Twitter
Among the individual stocks plunged Twitter by 9.7 percent, pre-market it was up to 25 percent. Elon Musk has put the takeover of the short message service Twitter on hold. The major investor has doubts about the number of actual users because of many fake accounts. Therefore, the takeover price may have to be renegotiated. But he doesn’t question the deal itself.
Robinhood jumped by almost 25 percent. The CEO of the cryptocurrency exchange FTX Trading has joined the operator of the trading platform of the same name. Sam Bankman-Fried owns 7.6 percent of Robinhood Markets, according to a filing with the Securities and Exchange Commission.
Fintechs in general were hit by the wheels in the course of the recent market turbulence. That also applied to Affirm Holdings, which are now 31.4 percent more expensive. The payment service provider had surprisingly increased its revenue significantly in the third quarter and was confident that it would be able to survive even in a volatile market environment. Since the beginning of the year, however, the share price has fallen by more than 85 percent.
The business figures of were also positive Motorola Solutions (+6.9 percent). The provider of communication solutions for authorities and organizations with security tasks, which emerged from the Motorola split in 2011, exceeded analysts’ expectations in the first quarter.
Dollar pulls back on the upside
The increased willingness to take risks manifested itself in the slightly weakened dollar dollar index lost 0.3 percent. However, the MUFG analysts continue to rely on rising dollar prices. The euro, on the other hand, is likely to remain susceptible to weak phases. On the bond market, too, where prices fell and yields rose, traders spoke of falling risk aversion. Concerns about stagflation had recently boosted the listings.
the oil prices meanwhile rose significantly, although the planned EU embargo on Russian oil is becoming increasingly unlikely. Hungary wants to oppose this. Nevertheless, the International Energy Agency sees a tighter supply due to the EU sanctions against Russia. Russia lost supply volumes in April, the development is likely to continue in May, it said.
Of the gold price fell to a fourteen-week low as market interest rates rose after posting its biggest weekly decline in 11 months. Overall, the demand with the tightening of monetary policy. The prospect of rising key interest rates speaks overall against the precious metal, it said.
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