Convincing business figures from Goldman Sachs are initially supporting the US stock exchanges, but the price rally in oil is again raising doubts among investors. With the prospect of the first interest rate hike in eleven years on Thursday, the euro is recovering somewhat.
An oil price rally has revived fears of inflation on Wall Street. This fueled interest rate fantasies that had actually fallen, and as a result, Wall Street turned negative over the course of the year. Convincing business figures from Goldman Sachs initially supported the mood and US stock markets - as did concerns about interest rate increases.
Because among investors, the fear that the US Federal Reserve will raise interest rates by 100 basis points at its upcoming meeting has diminished. The probability of an interest rate hike of more than 100 basis points was now priced in at less than 30 percent on the market. In the past week it had been over 90 percent in some cases. A rate hike of 75 basis points, however, is priced in, it said in the trade.
But the rally in the price of oil raised doubts among investors again. After all, skyrocketing energy prices are a crucial factor in inflation that is far too high. The Dow Jones index dropped 0.7 percent to 31,073 points, p
"I have a feeling that something is wrong: either the economic trajectory is wrong, or analysts are overly optimistic about earnings. And I have a feeling the latter is the case," said investment strategist Altaf Kassam of State Street Global Advisors on the current reporting period of the companies. After all, with Goldman Sachs a major bank knew how to convince. The financial institution posted a sharp drop in profits in the second quarter, but still earned more than expected. The stock rose 2.5 percent.
Profits at Bank of America also fell significantly, but analysts' expectations were missed here - the course stagnated, supported by optimistic statements on consumer finances. Financial services firm Synchrony Financial (-0.3%) beat market expectations, as did securities trader Charles Schwab (-1.5%). However, traders complained about the significant drop in retail sales. Aircraft orders from Delta Air Lines and Japan's ANA helped Boeing shares gain relative strength as stocks stagnated.
Oil price supported by dollar weakness
With the prospect of the first interest rate hike in eleven years on Thursday, the euro recovered somewhat, while the dollar index fell by 0.6 percent. Fading speculation of a 100 basis point Fed rate hike caused the greenback to weaken. The euro moved between the poles of interest rate hikes by the ECB, which the majority judged to be too low, and speculation about a possibly larger interest rate hike. Raising interest rates by 25 basis points would be a move that is "too little and too late," according to Saxo Bank's strategists. Julius Baer said the ECB could raise interest rates by more than the expected 25 basis points, which should boost the euro.
According to traders, prices on the oil market followed the euro upwards, while the dollar, which had come back from a 20-year high, supported oil prices. The price weakness in crude oil over the past week was mainly due to the strong dollar, it said. Meanwhile, the director of the International Energy Agency (IEA), Fatih Birol, warned: "We are experiencing the first truly global energy crisis in history" and the IEA has been warning for "many months that the situation in Europe is particularly dangerous."
In addition, data showed that the US government's strategic oil reserves had fallen to their lowest level since 1985. Government bonds fell in line with share prices, yields rose with the upcoming interest rate hikes in Europe and the USA. The yield curve was still clearly inverted, which was taken as a recession signal. The gold price hardly moved on a daily basis.
