(ABM FN-Dow Jones) The American stock markets were closed on Monday, with tech funds in particular losing value. Additionally, the S&P 500 gave away all of the earnings from earlier in the day and ended up closing slightly lower.
The S&P 500 index lost 0.5 percent to 3,821.35 points, after heading 0.8 percent higher earlier in the day. The Dow Jones index just gained 1.0 percent at 31,802.44 points. Tech exchange Nasdaq lost 2.4 percent on 12,609.16 points.
The Dow Jones index rose past its all-time high of 32,000 points, despite a rise in bond yields and price weakness in tech stocks. US President Joe Biden’s $ 1.9 trillion bailout plan was approved by the Senate last weekend. This is expected to accelerate the pace of the economic recovery and also lead to higher inflation.
Money managers are therefore moving from government bonds and technology funds to banks and energy stocks that are likely to recover with the economy.
“This is what I call a stealth correction,” said market strategist Keith Lerner of Truist Advisory Services. “No money is flowing out of the market, it just goes to other names,” said Lerner.
But after a significant sell-off in recent weeks, the price drop at some of the high-flyers of last year has gone too far, Lerner thinks. According to him, the correction of these shares will come to an end soon. “I think ten-year rates will stabilize soon. The outlook for equities is bright.”
Billionaire and investor David Tepper, founder of Appaloossa Management, also expressed the expectation that bond yields will stabilize. Especially from Japan, Tepper sees renewed interest in equities. “It is very difficult to be negative about the stock markets at the moment,” Tepper concluded.
Renewed optimism around financials like Goldman Sachs and American Express, which are benefiting from higher interest rates and a reopening of the economy, helped the Dow Jones index move up on Monday.
The US Centers for Disease Control and Prevention said on Monday that Americans who have been fully vaccinated against the coronavirus may meet in small groups, but warned that masks and sufficient distance are still needed to prevent further spread of the virus.
The oil price closed lower on Monday after a volatile day. At a settlement of $ 65.05, a barrel of West Texas Intermediate became 1.6 percent cheaper. This morning, the price of oil soared after a major Saudi Arabia oil port on the Persian Gulf was hit by missile and drone strikes by Yemeni Houthi forces backed by Iran. Among other things, a strong dollar caused oil prices to fall.
The euro / dollar was trading at 1.1846. When the US stock markets closed on Friday, there was 1.1918 on the boards.
Company news
General Electric is close to a $ 30 billion deal to combine its aircraft rental business with Irish AerCap Holdings, sources say. An announcement is expected on Monday. The share was approximately four percent higher.
Tesla again lost almost six percent. The share has already fallen by 17 percent in the past four trading days.
McAfee is selling its Enterprise arm to a consortium led by Symphony Technology Group for $ 4 billion. The transaction is expected to be completed before the end of 2021. The McAfee stock rose nearly thirteen percent.
DuPont has purchased Laird Performance Materials from Advent International for $ 2.3 billion. The acquisition is expected to be completed in the third quarter of 2021. The DuPont share rose approximately one and a half percent.
The University of Oxford, which has developed a vaccine against the coronavirus together with AstraZeneca, is opposed to the IPO of a startup behind that collaboration. AstraZeneca’s share rose by more than two percent.
Huawei has lost market share in mobile phone equipment outside of China, according to a research firm. This indicates that the US campaign against the Chinese technology company is starting to bear fruit. Market share fell from 22 to 20 percent last year, according to Dell’Oro Group, while rivals Ericsson and Nokia gained ground with 35 and 25 percent market share outside of China. Nokia fell a few tenths of a percent in New York.
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