Following the release of the Federal Reserve’s June policy meeting minutes on Wednesday afternoon, U.S. stocks rose, with several Fed officials seeing monetary policy tightening occurring sooner than expected as the economy recovers from the pandemic, but no move to taper asset purchases appears imminent. What are the major indices performing these days?
The Dow Jones Industrial Average DJIA, +0.13 percent increased by 61 points, or 0.2%, to 34,640.
The S&
The Nasdaq Composite Index COMP, -0.09% increased 8 points, or 0.1 percent, to 14,672 after setting a new intraday high of 14,755.33 earlier in the session.
The Dow Jones Industrial Average dropped 208.98 points, or 0.6 percent, to settle at 34,577.37 on Tuesday. The S&P 500 fell 0.2 percent on the day, ending a run of seven consecutive record closing, the longest such run since an eight-day streak ended in 1997. The Nasdaq Composite finished 2021 with a 0.2 percent gain, setting a new high for the year.
What is the market’s driving force? Following the release of the Federal Reserve’s mid-June rate-setting meeting minutes, investors were focused on when the Fed would start to roll back its very supportive monetary policies. Several Fed officials have suggested that conditions are ripe for the central bank to begin tapering its large-scale asset purchases sooner than planned, starting with fewer monthly mortgage bond purchases. See: The Fed debated tapering at its June meeting, but nothing appears to be imminent, according to minutes. At the Fed’s earlier June 15-16 meeting, policymakers raised their expectations for a policy interest rate hike and began discussing when it would be acceptable to discuss the unwinding of its $120 billion-per-month asset purchases, which might put downward pressure on Treasury rates. In emailed remarks, Bob Miller, BlackRock’s head of Americas fundamental fixed income, stated, “Monetary policy recalibration is now on the table, as the FOMC becomes genuinely more data based and less calendar driven.” Since the meeting, investors have heard from nearly every Fed official, giving the market a good understanding of where the central bank stands, according to several analysts. Before pulling back its large-scale purchases of Treasurys and mortgage-backed securities or raising interest rates, the Fed has indicated that it wants to see a string of positive monthly employment reports. Interest rates are now set at a range of 0% to 0.25 percent. Read more: June jobs report strengthens case for Fed to start tapering bond purchases this year According to a report released by the Labor Department on Wednesday, job openings in the United States reached a new high of 9.21 million in May, suggesting increased demand for labor as the economy reopens and firms fight to keep up with growing sales of their goods and services. In a daily note, Peter Boockvar, chief investment officer at Bleakley Advisory Group, stated, “Hiring is still a problem as they decreased by 85,000 in May and after a sharp surge in the two prior months of 609,000, the number of quitters fell by 388,000.” In the end, we’ll see how these figures come together in the following months as kids return to school, increased unemployment benefits expire, and the vaccine is rolled out more widely, although at a much slower pace, he added. For three months in a row, the data on job availability has hit a new high, and it may be beginning to weaken investors’ faith in a strong economic recovery from the COVID-19 pandemic. In a recent study report, the Dallas Federal Reserve claims that the US economy could be one month away from full employment, saying that the labor market should be judged by a “neutral” criterion rather than pre-pandemic levels. Nonetheless, fears about the recovery have been reflected, at least in part, in a recent drop in longer-term bond yields. Buyers in yield-sensitive parts of the stock market, such as businesses in the technology-heavy Nasdaq Composite and growth stocks, were encouraged by the drop in Treasury yields, with the 10-year Treasury note TMUBMUSD10Y, 1.318 percent falling to 1.31 percent on Wednesday. Markets, on the other hand, may be concerned that buying government bonds indicates that some investors have reservations about the stock market’s capacity to provide future record gains. As investors weigh the risk of lower bond yields affecting the financial sector’s profitability, bank stocks were split, with Goldman Sachs GS, -0.73 percent stock falling and JPMorgan Chase JPM, +0.05 percent stock rising little. Separately, crude-oil futures CL.1, -1.76 percent fell sharply after the Organization of the Petroleum Exporting Countries and its Allies — known as OPEC+ — disagreed on expanding output. On Tuesday, WTI crude briefly reached a six-year high before falling. What the OPEC standoff means for oil prices and financial markets may be found here. As Beijing tightens its grip over the country’s major tech enterprises, investors have become skeptical of Chinese technology companies listed on US exchanges. Didi Global Inc. DIDI, -3.96 percent was down 3.8 percent on Wednesday, after plunging 19.6 percent on Tuesday following its New York IPO last week. Which businesses are being scrutinized?
Shares of AMC Entertainment (AMC, -10.10 percent) and GameStop Corp. (GME, -5.81 percent) were lower on Wednesday, extending losses for the fourth day in a row.
The parent company of teen retailer Forever 21, Authentic Brands Group, has filed to go public.
It intends to trade under the ticker “AUTH” on the New York Stock Exchange.
Planet Labs Inc. is expected to go public through a merger agreement with dMY Technology Group Inc. IV DMYQ.UT, +1.94 percent, a special-purpose acquisition company, in a deal valued at around $2.8 billion.
Coinbase Global Inc. (COIN) saw its stock rise 4.2 percent on Wednesday after Oppenheimer analyst Owen Lau said he was a touch more bullish on the cryptocurrency trading platform, citing prospects for excellent second-quarter earnings.
Chobani stated on Wednesday that it had filed a confidential draft registration statement with the Securities and Exchange Commission for a possible initial public offering.
Moderna Inc. (MRNA) saw its stock drop 4.7 percent on Wednesday after the firm said that patients in a Phase 1/2 clinical trial assessing an untested seasonal flu vaccine had begun receiving treatment.
Biohaven Pharmaceutical Holding Co. Ltd. (BHVN) saw its stock rise about 13% on Wednesday after the firm announced that sales of its breakthrough migraine therapy reached $93 million in the second quarter of 2021.
What are the trends in other assets?
The ICE U.S. Dollar Index DXY, which compares the currency to a basket of six main competitors, was up less than 0.1 percent.
On the New York Mercantile Exchange, the US oil benchmark CL00 slid 1.5 percent to $72.24 a barrel. The price of gold futures GC00 increased by 0.6 percent to $1,805 per ounce.
European markets ended the day higher, with London’s FTSE 100 UKX up 0.7 percent and the Stoxx Europe 600 index SXXP finishing at its second-highest level ever.
The Shanghai Composite SHCOMP jumped 0.7 percent in Asia, while Hong Kong’s Hang Seng Index HSI declined 0.4 percent and Japan’s Nikkei 225 NIK dropped 1%.
William Watts contributed to the story./n
