NEW YORK (Dow Jones)–After the recent rally, Wall Street appears to be settling into the expected consolidation. In the wake of the January slump, the blackest month since the beginning of the pandemic, there was a significant recovery. Quarterly figures are causing movement, above all those of Google’s mother company Alphabet and the semiconductor manufacturer Advanced Micro Devices (AMD). On the other hand, weak ADP labor market data have hardly any impact – also with a view to the official labor market report for January on Friday. The development is likely to be due to the special factor Omikron – and thus only temporarily.
The focus of the US Federal Reserve has also recently clearly shifted to the topic of fighting inflation, which is why the data is unlikely to have any impact on monetary policy. However, traders do not consider rising interest rates with a weak labor market development to be very advantageous. The Dow Jones index fell by 0.1 percent to 35,383 points around noon local time. The S&P 500, on the other hand, gained 0.3 percent. The Nasdaq Composite, which has risen sharply recently, is down 0.1 percent. The prospect of monetary tightening, which weighed heavily on technology prices in January, has receded into the background.
“The focus is clearly on corporate reports and we’re seeing strong results from big tech companies. But at some point sentiment may shift back to macro data and the Fed – we think we’ll be oscillating between those two poles,” says investment strategist Luc Filip from SYZ Private Banking. The expert adds that this means more volatility for the financial markets. Halfway through the earnings season, the number of companies that have beaten the Wall Street market’s sales and earnings expectations is above average, albeit lower than when the upleg began, an analysis by Deutsche Bank illustrates.
AMD and Alphabet are bullish
The Dow is mainly slowed down by Boeing (-1.9%). According to the US space agency NASA, the moon rocket developed by the aviation group will roll to the launch pad in Florida with a delay and be tested there.
Alphabet’s stock jumped 7.7 percent after the company once again reported rapid growth. Despite the regulatory pressure, the digital group almost doubled its profits last year.
Business figures and the outlook for the chip manufacturer Advanced Micro Devices (AMD), whose shares rose by 4.3 percent, were also received with euphoria. The share of the competitor Intel, on the other hand, fell by 0.4 percent.
PayPal collapsed by 24.9 percent. The payment service provider earned slightly less than expected in the fourth quarter of 2021 and provided a disappointing outlook for the current year. With a minus of 3.8 percent, investors react to the number of General Motors (GM). The automotive group’s profits did not fall as much as feared in the fourth quarter.
Starbucks numbers (-0.8%) included highlights and shadows. The coffee house chain reported strong sales development in its first fiscal quarter, but the profit was disappointing. The business figures of the pharmaceutical company Gilead Sciences (-5%) are classified as mixed. Although sales did not fall as sharply as feared, profits are below expectations. Ironically, sales of “Remdesivir” for the treatment of Covid-19 decreased. Competitor Abbvie (+0.1%) increased profits more than expected in the fourth quarter thanks to a good development in all segments. The outlook also surprised positively.
Dollar down – Euro firm
The mood for the dollar has turned. The dollar index bt a further 0.4 percent. “There are two main reasons for this,” says Ricardo Evangelista of Activtrades. On the one hand, the willingness to take risks is returning to the markets. That makes the dollar less attractive as a so-called safe haven. On the other hand, Fed officials have been dampening speculation about a 50 basis point rate hike in March since the weekend.
According to the inflation data for January from the euro zone, the euro has meanwhile surpassed the 1.13 dollar mark and is at its highest level for a week. The further accelerated rise in prices above the forecasts is likely to increase the pressure on the ECB, which meets on Thursday, to take monetary policy measures to combat the high inflation.
Oil prices initially shot up with new headlines on the Opec+ group’s funding policy, but then came back more clearly. The cartel is sticking to the planned increase in funding. In view of the seven-year price high and the strong demand, some market participants had bet on a stronger increase in the oil supply. The surprisingly lower weekly US oil storage data are creating additional pressure.
On the bond market, the weak labor market data are supporting sentiment somewhat, and yields are falling. The gold price benefits from the dollar weakness.
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INDEX last +/-% absolute +/-% YTD
DJIA 35,383.15 -0.1% -22.09 -2.6%
S&P 500 4,560.47 +0.3% 13.93 -4.3%
Nasdaq Comp. 14,337.76 -0.1% -8.25 -8.4%
Nasdaq-100 15,036.95 +0.1% 17.27 -7.9%
US Bonds
Term Yield Bp to VT Yield VT +/-Bp YTD
2 years 1.15 -1.6 1.17 42.0
5 years 1.59 -3.4 1.62 32.7
7 years 1.71 -3.9 1.75 27.4
10 years 1.75 -4.2 1.79 23.9
30 years 2.08 -3.8 2.11 17.6
FOREX last +/- % Wed,8:30 Tue, 17:47% YTD
EUR/USD 1.1299 +0.2% 1.1278 1.1241 -0.6%
EUR/JPY 129.22 -0.0% 129.26 128.99 -1.3%
EUR/CHF 1.0380 -0.0% 1.0379 1.0376 +0.1%
EUR/GBP 0.8328 -0.1% 0.8332 0.8325 -0.9%
USD/JPY 114.38 -0.3% 114.73 114.76 -0.6%
GBP/USD 1.3567 +0.3% 1.3536 1.3501 +0.3%
USD/CNH (Offshore) 6.3606 -0.2% 6.3718 6.3723 +0.1%
Bitcoin
BTC/USD 37,341.16 -3.5% 38,379.41 38,957.41 -19.2%
ROHL last VT-Settl. +/- % +/- USD % YTD
WTI/Nymex 87.47 88.20 -0.8% -0.73 +16.8%
Brent/ICE 88.65 89.16 -0.6% -0.51 +14.4%
METALS last day before +/- % +/- USD % YTD
Gold (Spot) 1,809.07 1,801.09 +0.4% +7.98 -1.1%
Silver (Spot) 22.74 22.65 +0.4% +0.09 -2.4%
Platinum (Spot) 1,043.26 1,030.45 +1.2% +12.81 +7.5%
Copper Future 4.48 4.43 +1.0% +0.05 +0.4%
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(END) Dow Jones Newswires
February 02, 2022 12:17 PM ET (17:17 GMT)
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