NEW YORK (dpa-AFX) – The prospect of a less expansive monetary policy by the US Federal Reserve should initially keep the US stock exchanges in check on Wednesday. Fed Chairman Jerome Powell will only comment on growth, inflation and the bond purchases in late trading. Until then, the courses could be more or less on the spot. Around an hour before the starting bell, the broker IG indexed the leading index Dow slightly in the red at 35,512 points.
The main focus of the markets is on the Fed’s bond purchase program, which was launched during the Corona crisis to support the economy. Economists expect the central bank to curb monthly purchases more quickly than previously planned – despite new corona worries. This would also open up the possibility of raising key interest rates earlier than previously expected in the coming year.
“The central question is how hard the Fed wants to fight against the ever increasing inflation,” said strategist Jürgen Molnar of Robomarkets. It’s about the pace of slowing bond purchases and how often and when the Fed raises interest rates. “If the Fed goes too far with its measures, this is likely to be taken up negatively by the stock market.” On the other hand, if there is a lack of determination to fight inflation, that would also be a negative signal, as inflation fears would then prevail in the market. “It is and will be a tightrope walk by the Fed”.
The stock exchange traders are likely to have an eye above all on stocks from the technology sector, which is considered to be particularly interest-dependent. When capital market rates rise, companies tend to be reluctant to invest in IT. Should the Fed tighten the reins of monetary policy more than expected, prices on the Nasdaq technology exchange could come under pressure. Before the trading session, the Nasdaq 100 showed a slight increase.
The shares of Eli Lilly were wanted in the pre-trading session in the middle of the week. Thanks to its corona antibody business, the pharmaceutical company has raised its forecast for adjusted earnings per share this year. As a result, the price rose by almost five percent.
On the other hand, papers from Domino’s Pizza were sold, losing 2.5 percent. Investment bank Barclays advised that the portfolio should be underweighted in the fast food chain. Booking, on the other hand, was able to gain 1.3 percent after JPMorgan recommended buying the shares of the online travel portal ./bek/jha/
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