Fed, energy costs and war
Wall Street suffers from fears of rate hikes
04/18/2022, 10:28 p.m
The state of the world isn’t exactly something investors are excited about right now. In addition, there are rising energy prices and the prospect of a tighter monetary policy from the Fed. At the start of the week, there was reluctance on the US stock exchanges – but there is also reason for optimism.
Wall Street started weaker at the beginning of the new trading week. According to stockbrokers, investors are worried about a sharp tightening of the US Federal Reserve’s monetary policy with rising interest rates. The Dow Jones index closed 0.1 percent lower at 34,412 points, the S&P 500 was almost unchanged. The tech-heavy Nasdaq Composite was also down 0.1 percent. “The Fed’s monetary policy, very high energy costs and the economic problems caused by the war in Ukraine will weigh on markets in the coming weeks – unless a solution is found,” said Rick Meckler, a partner at investment firm Cherry Lane Investments .
The situation could improve if the many quarterly reports that are due in the coming weeks turned out well, said stockbrokers. Balance sheets so far have met expectations, said Peter Cardillo, chief economist at Spartan Capital Securities in New York. “There have been some negative forecasts, but overall it looks like US companies can live with higher inflation and the higher cost of money.”
Bank of America made surprisingly good first-quarter earnings thanks to its fast-growing consumer lending business. The shares gained 3.4 percent. In the further course of the week, Netflix, Tesla, Johnson & Johnson and IBM, among others, presented figures. Twitter papers gained 7.5 percent. The group defended itself with a “poison pill” against an increase in shares by Tesla boss Elon Musk makes it difficult for large investors to increase their stake.
Tesla shares rose 2.0 percent. According to insiders, the US electric car manufacturer called its employees back to the factory in Shanghai. The economic metropolis was in lockdown for three weeks due to an outbreak of the corona variant Omicron.
Oil prices continued to rise after oil prices had risen sharply ahead of the long weekend amid concerns over an EU import embargo on Russian oil products. Added to this were political uncertainties and production cuts in Libya. The price of a barrel of the US variety WTI rose by 0.9 percent to $ 107.91. Gold benefited slightly from its supposed “safe haven” status given the ongoing war in Ukraine. The price of the troy ounce increased by 0.2 percent to 1978 dollars.