Equities New York Conclusion: Investors reward good company figures | 04/28/22

NEW YORK (awp international) – After another rollercoaster ride, the US stock markets partially recovered from the recent series of losses and rose significantly on Thursday. The stock markets rose more strongly than in seven weeks after good quarterly figures from some tech heavyweights fueled optimism that corporate profits could withstand a restrictive US monetary policy. Investors also saw signs of solid consumer demand despite a surprise slowdown in economic growth.

The Dow Jones Industrial, which was initially firmer, briefly turned negative in early trading, but recovered significantly and closed up 1.85 percent at 33,916.39 points. The market-wide S&P 500 gained 2.47 percent to 4287.50 points. The tech-heavy Nasdaq 100, which fell to its lowest level in more than a year the day before, rose 3.48 percent to 13,456.06 points on Thursday.

“We have corrected a great deal in a very short space of time and given the oversold levels I think we could be poised for a bounce if earnings continue to come in better than feared,” said Anastasia Amoroso, chief investment strategist at iCapital. “The problem is: How long will this upswing last?”

Very positively received business figures of the Facebook parent company Meta and the resulting jump in the share price acted as a driver for the price rally of the entire market, but especially of the technology stocks, which had recently slipped significantly. “The earnings season has delivered more good news than bad news overall and could help divert investor focus from the macroeconomic headwinds that have weighed on major indices this month,” noted market strategist Art Hogan of National Securities.

Meanwhile, the US economy contracted surprisingly over the winter. Gross domestic product (GDP) fell an annualized 1.4 percent in the first quarter. Economists, on the other hand, had expected growth of 1.0 percent. As expected, initial jobless claims fell slightly last week.

After the number of Facebook users increased significantly again at the beginning of the year after a recent slump, the papers of the social media giant Meta soared by almost 18 percent. DZ Bank expert Ingo Wermann spoke of a “rally of relief” and then gave up his previous sell recommendation. According to Evercore ISI analyst Mark Mahaney, the rating of the paper has “now become downright ridiculous” for a leading global social media platform.

There was also relief in the tech industry because of good numbers from Qualcomm. A strong position in the smartphone market had brought the chip company, which is geared towards the telecoms sector, rapid growth in the past quarter, and the shares rose by almost ten percent. Experts therefore consider price gains in the diversified US chip sector to be likely. The shares of the payment service provider Paypal increased by 11.5 percent according to figures.

The earnings season also continued among Dow members with agendas packed to the brim. However, there was more mixed news here overall. McDonald’s and Merck & Co posted price gains of 2.9 and 4.9 percent, respectively. The fast-food chain had posted better-than-expected quarterly profits, and the pharmaceutical company’s increased annual targets were well received.

This was offset by price losses of 4.3 at Amgen. Despite a surprisingly significant increase in sales in the first quarter, the biotech company is sticking to its annual revenue forecast, disappointing its investors. Worries about an impending back tax payment added to the burden.

The euro recovered slightly in US trading from falling below $1.05 in European trading. Most recently, the common currency cost $ 1.0504. It had previously slipped as low as $1.0472, its lowest level since January 2017. The European Central Bank (ECB) had set the reference rate at 1.0485 (Wednesday: 1.0583) dollars. The dollar had thus cost 0.9537 (0.9449) euros.

US Treasuries continued the losses they suffered midweek. The futures contract for ten-year Treasuries (T-Note Future) recently fell by 0.18 percent to 119.58 points in the course of trading. The yield on ten-year government bonds rose to 2.83 percent./edh/he

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