A central topic on Wednesday remained the development of the bond market, which has recently become an indicator of investors’ fears of rising inflation. US producer prices continued to make a significantly stronger contribution than expected. If yields rise with price expectations, bonds become more attractive compared to stocks. According to market observer Craig Erlam from broker Oanda, investors are therefore staying vigilant. “If yields begin to rise too quickly, the mood in the stock market should turn quickly,” he thought.
The market-wide S&P 500 fell 0.36 percent to 3918.51 meters. For the technology-heavy selection index Nasdaq 100 it even went down by 0.87 percent to 13,654.12 points.
On the Dow, the pressure has been eased by two stocks in particular that seem to have piqued the interest of investor legend Warren Buffett. Papers of the oil company Chevron and the telecommunications provider Verizon rose at the top of the Dow by 2.6 and 3.9 percent, respectively.
It was previously known that Buffett’s investment vehicle Berkshire Hathaway has recently relied on the two stocks and has instead reduced its exposure to Apple. The iPhone manufacturer’s papers then lost 1.8 percent of their value, thus setting the course for the tech industry. Investors took it as a signal that Buffett is switching to defaults like Chevron and Verizon.
Wells Fargo caused a stir with a price jump of 5.3 percent after the market said the financial institution was making progress in talks with the Federal Reserve about imposed restrictions. It should be about plans to improve internal risk management and corporate governance.
Otherwise, quarterly figures and outlooks for some companies from the second row received attention. The car rental company Avis Budget surprised with higher-than-expected net sales in the fourth quarter, but the shares still fell by ten percent. According to stockbrokers, this was due to the fact that the company does not trust itself to be able to forecast the year in the corona crisis.
Meanwhile, the insurer AIG reported a declining adjusted surplus in the past quarter, which started the shares in the red. But investors suddenly took hold of them, they turned one percent into positive territory. It was also announced that AIG had received inquiries from interested parties to participate in the life and retirement insurance business.
In the generally weaker technology sector, there were also positive sector exceptions, such as the five percent higher paper from Agilent. The company specializing in measurement technology impressed with a strong outlook. Bank of America reacted promptly and now recommends buying the stock./tih/he
(AWP)
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