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This is what it looked like for the leading US stock market indices at closing Wednesday:
- The Dow Jones Industrial Average, which consists of 30 handpicked assumed key stocks, rose 1.45 percent
- The combined index S & P 500, consisting of 500 of the largest listed companies in the US, rose 0.86 percent
- Nasdaq Composite, which is dominated by technology companies, rose 2.08 percent
The Nasdaq index has now climbed close to eight percent since the end of January, after first falling 15 percent since year-end.
The S & P 500 and Dow Jones index fell 3.8% and 1.5%, respectively, since year-end.
The interest rate on US government bonds with a ten-year maturity, often referred to as the world’s most important rate for its effect on other interest rates and financial sizes worldwide, fell from 1,956 to 1,932 percent.
The US companies continue to deliver strong results. According to Factset, 60 percent of the 500 companies included in the S&P 500 have now submitted quarterly figures, and 77 percent of these have delivered above analysts ‘ earnings estimates.
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One of the exceptions is Facebook owner Meta, who disappointed both on user growth and earnings. The share has fallen almost 30 percent since the third quarter report was presented 2. February.
Inflation and increased interest rate fears have been identified as the main causes of the turbulence that has affected equity markets so far this year. The US central bank has already announced several interest rate hikes in 2022, with the first in March. The Bank of England has recently completed two interest rate hikes, while the European Central Bank has opened up to raise interest rates from today’s zero level faster than previously planned.
Raphael Bostic, executive director of the Atlanta Federal Reserve, one of the central bank’s twelve district banks, said Wednesday he expects three to four interest rate hikes this year, according to CNBC. He is leaning towards four, but says it will depend on developments in the economy going forward. Market prices in turn entered a total of five interest rate hikes this year.
On Thursday, inflation figures from the United States will be released. An increase in total inflation is expected to be 0.4 per cent from December and 7.2 per cent from January last year – the latter will be the largest increase since 1982. In December, inflation increased by 7.0 per cent, also the largest increase since 1982.
– Real headwind
“Right now, people are looking for earnings in the markets. We know that through 2022, earnings will come under pressure, as margins weaken and the economy slows down, which is why we are concerned about rising interest rates, elevated inflation and failed economic policies this year, ” said Jack Manley, global market strategist at JPMorgan Asset Management. Yahoo Finance.
Victoria Fernandez, market strategist at Crossmark Global Investments, believes there is too much volatility to be confident of a comeback in the markets.
“You have a market that is trying to digest so many elements: you have a reasonably strong economy, but you have these inflation concerns, you have valuations that have been slightly stretched, you have questions about what monetary policy is going to look like during 2022. “I would be careful not to go all-in believing that this is an upturn that will not recur,” she added.
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“The market is really going nowhere this year. There is real headwind for the growth part of the market, ” Annandale Capital Chief Executive George Seay told Yahoo Finance Wednesday.
Andrew Slimmon, Chief Executive of Morgan Stanley Investment Management, said the current recovery after the 2020 coronary recession is comparable to 1992, 2004 and 2011 – “single-digit return years” after previous recessions.(Terms)Copyright Dagens Virksomhet AS and/or our suppliers. We would like you to Share our cases using a link that leads directly to our pages. Copying or any other form of use of all or part of the content may only be done with written permission or as permitted by law. For additional terms look at this..
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