In the evening, the US monetary authorities will discuss further steps in the fight against inflation. Because of the appointment, many Wall Street investors are keeping their feet still. Amazon's participation in the delivery service GrubHub is causing a stir.
Few investors on Wall Street have dared to come out of cover ahead of the Federal Reserve Board meeting minutes. The Dow Jones Index and the broader S
At the meeting in mid-June, the Fed had raised its key interest rate by three quarters of a percentage point - the biggest jump since 1994. In the evening the monetary authorities held out the prospect of another interest rate hike for the end of July by 05.05 percent or 0.75 percent.
Investor fears of more major rate hikes and a resulting recession were reflected in rising bond prices, pushing the yield on the 10-year US Treasury to a five-week low of 2.793 percent. Investors also braced themselves for a fall in demand on the commodity markets. For the first time since April, the price of the North Sea variety Brent slipped below $100 per barrel and cost around 3.5 percent less at $99.15. On Tuesday, the price collapsed by almost 10 percent due to investors' fears of a recession.
The speculation that interest rates in the USA would continue to rise pushed the dollar higher. The dollar index, which measures the currency against other major currencies, climbed 0.6 percent to 107.18 points. The euro depreciated by up to one percent and hit a 20-year low for the second day in a row at $1.0161. "On the one hand, the obvious general conditions of rising inflation and geopolitical and economic upheavals caused by the war in Ukraine, including the impending energy crisis, are a burden," said investment strategist Jürgen Molnar from the brokerage house RoboMarkets. "On the other hand, the high interest rate differentials between Europe and the USA are decisive. In the USA, interest rates have already been raised several times by the Fed, but not yet in the euro zone."
According to strategists, the slide below parity is getting closer for the euro. Most recently, the rate was less than a dollar in December 2002. In view of the government crisis in London, the pound was around half a percent weaker at $1.1894.
The reaction to the resignations of several ministers and state secretaries is still limited, said economist David Page of AXA Investment Managers. "However, the longer political uncertainty in the UK persists, the more we would expect it to make itself felt in UK financial markets." Despite the protests, British Prime Minister Boris Johnson, who is under pressure, wants to continue his government work.
A partnership between Amazon and the food supplier GrubHub caused a sensation. The American online retailer is taking a two percent stake in the US subsidiary of Just Eat Takeaway and is offering its Prime customers free access to the service for a minimum order size for one year. The threat of intensified competition saw the titles of GrubHub rival DoorDash collapse by more than seven percent. Shares in the transport service provider Uber, which also delivers meals with Uber Eats, fell 3.5 percent.
Rival Paper Excellence Group's $2.7 billion takeover bid sent shares of Resolute Forest Products a record jump. They rose 63 percent to $20.45. Paper Excellence is offering $20.50 per share for the paper and wood products maker.
The titles from Rivian Automotive were also able to gain more than eleven percent. Thanks to ramped-up production, deliveries from the e-car manufacturer almost quadrupled in the second quarter. "The most important thing for the stock right now is that investors have confidence in the 2022 guidance," said Redburn analyst Charles Coldicott. The papers have lost almost three quarters of their value since the beginning of the year.