(ABM FN-Dow Jones) On Monday, the US stock exchanges largely wiped out the sharp losses from earlier in the day. At a close of 4,670.29 points, the S&P 500 eventually fell 0.1 percent. The Dow Jones index lost 0.5 percent at 36,068.87 points and the Nasdaq even rose 0.1 percent at 14,942.83 points.
Sentiment is uncertain as the Federal Reserve appears to be tightening policy reins faster than expected. This was made clear last week from the minutes of the latest central bank policy meeting. Meanwhile, the US 10-year yield has risen to around 1.80 percent. At the end of 2021, that was still 1.50 percent.
Goldman Sachs economists are now anticipating four rate hikes in 2022, instead of three, and also expect balance sheet normalization to happen sooner. Instead of the end of this year, Goldman thinks the Fed may stop reinvesting bond redemptions as early as the summer.
“Reducing labor market underutilization makes Fed officials more sensitive to upward inflation risks and less sensitive to downward growth risks,” Goldman Sachs said.
According to market analyst Naeem Aslam of AvaTrade, US inflation data to be released later this week is especially important for the markets and could cause volatility.
“Investors are looking for signs of whether inflation is still at a point where the Fed can intervene through monetary policy or that the Fed is lagging behind to tackle high consumer prices,” said Aslam, also pointing to the nomination hearing. for the reappointment of Jerome Powell to the US Senate on Tuesday and that of Fed Vice-President Lael Brainard on Thursday.
US inflation, which will be released on Wednesday, is expected to rise from 6.8 percent in November to 7.1 percent in December.
At the end of this week, the season for the quarterly figures will start with the major US financials JPMorgan Chase, Citigroup, Wells Fargo and BlackRock. Many investors put money in bank stocks because they expect to benefit from rising interest rates.
But for the broader market and for technology stocks in particular, the outlook is less attractive. “Stocks are going down and so are bonds,” said PineBridge’s Hani Reda. “For now, even cash is better than owning risky investments.”
Oil prices fell on Monday. At a settlement of $78.23, a barrel of West Texas Intermediate became 0.9 percent cheaper. Investors weighed concerns about omikron against production disruptions in Kazakhstan and Libya.
The euro/dollar traded towards the close at 1.1329. The Russian ruble rose on the back of US-Russia talks over building up Russian troops along the border with Ukraine. ING sees little chance of a breakthrough to ease tensions as NATO will find it difficult to meet Russia’s demand to refuse applications from Ukraine to join.
Company news
PC sales are set to cool significantly this year, following spectacular growth. This makes this market an even more important battleground for rivals Intel and AMD. Since 2018, AMD has been one step ahead of Intel’s chips, since it had processors made at TSMC in Taiwan. In the third quarter of 2021, AMD had a 21 percent market share in PC central processors. Four years earlier this was only 8 percent. AMD closed flat after a loss earlier in the day, while Intel ended up more than 3 percent.
The race for the electric car market is getting busier. Both Ford and General Motors are coming with new electric pickup trucks. A large number of new electric models will be introduced to the global car market in the coming years. Ford and GM lost about 2 percent on Monday.
Goldman Sachs remains positive on Tesla and raised its price target from $1,125 to $1,200 on an unchanged buy rating. Analyst Mark Delaney lists the electric vehicle maker as one of his top picks for 2022 and is also positive about industry trends. Tesla rose 3 percent after a lower opening. Rival Nikola lost more than 6 percent.
Moderna sold 807 million corona vaccines last year and achieved a turnover of 17.5 billion dollars. Contracts worth USD 18.5 billion have already been signed for 2022 and options for USD 3.5 billion on top of that. The stock closed more than 9 percent higher on Monday.
Take-Two to acquire Zynga for $12.7 billion. The purchase price of $9.86, paid for $3.50 in cash and the remainder in stock, offers a premium of 64 percent. Shares of Zynga rose nearly 40 percent while Take-Two fell more than 13 percent.
Pizza Hut will put Beyond Meat’s Italian Sausage Crumbles on its menu in Canada. The producer of meat substitutes announced this on Monday. Beyond Meat nevertheless fell more than 2.5 percent.
Bron: ABM Financial News
From Beursplein 5, the editors of ABM Financial News keep a close eye on developments on the stock exchanges, and the Amsterdam stock exchange in particular. The information in this column is not intended as professional investment advice or as a recommendation to make certain investments.
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