There are many reasons for concern in the financial markets at the moment. But robust economic data, weakening inflation and a clear interest rate communication from the US Federal Reserve are making Wall Street cheerful. Bank stocks in particular are happy about whopping price jumps.
Easing fears of more drastic rate hikes by the US Federal Reserve are buoying Wall Street. In addition, encouraging economic data and corporate balance sheets lifted sentiment. The US standard value index Dow Jones closed 2.2 percent higher on Friday at 31,288 points. The tech-heavy Nasdaq advanced 1.8 percent to 11,452 points. The market-wide S
Investors reacted with relief to the statements by two leading US central bankers, who advocated a rate hike of 0.75 percentage points in two weeks. They had feared a full percentage point hike after Tuesday's surprisingly high US inflation data. "The debate about a 100 basis point rate hike has the market in suspense," said Peter Cardillo, chief economist at investment firm Spartan.
The stockbrokers also rated the surprisingly robust economic data positively. The retail sector increased its sales in June more than expected. Furthermore, sentiment among industrial companies in New York State surprisingly and significantly improved in July. In addition, the upward trend in prices for goods imported into the USA weakened again in June.
Meanwhile, oil prices rebounded on fading hopes of an end to the supply crunch. The US variety WTI rose in price by around two percent to $97.67 per barrel (159 liters). Immediately before Joe Biden's first visit as US President to Saudi Arabia, a US administration official said that the Kingdom was not expected to expand oil production anytime soon. The price drop in recent weeks robs Biden of important arguments for his demand for higher production, said analyst Stephen Brennock of brokerage house PVM Oil Associates.
Investors rated the numbers of Citigroup positively. Quarterly profit fell to $4.5 billion from $6.19 billion due to provisions for bad loans. However, experts had feared a larger decline. Both the interest and fee income surprised positively, comments analyst Ken Usdin from the investment bank Jefferies. The same applies to the capital ratio. Citi shares then jumped more than 13 percent.
In its slipstream, rival Wells Fargo's titles gained more than 6 percent, although its quarterly profit surprisingly halved to $3.1 billion. However, expectations are so low that many investors see this as an opportunity to get started, says stock trader Dennis Dick from brokerage house Bright Trading. This pattern will certainly be observed more often in the current accounting season.
Blackrock's shares also overcame their initial weakness and rose by almost two percent to $600.37. The profit of the world's largest wealth manager shrank by 30 percent. But nothing has changed in his long-term positive assessment, writes analyst Greggory Warren from the research house Morningstar. He is therefore sticking to his target price of $850.
A media report on planned price increases at the streaming service ESPN, which specializes in sports events, encouraged investors to invest in Walt Disney. The shares of the entertainment group rose by 3.7 percent. According to Variety magazine, fees are expected to increase by 43 percent, or $3 a month.
