Solid financial results of the companies for the 3rd quarter supported the growth of the main US indices. At the close of the NYSE, Dow Jones increased by 0.04% and updated its all-time high, the S&P 500 added 0.18%, and the NASDAQ increased by 0.06%. Investors are ignoring all the rising inflation signals so far and are more focused on capitalizing on corporate earnings. Many analysts were surprised by such good results of the companies, as they are sure that the growing problems in the supply chain will be negatively reflected in the reports in the future. Some companies have already worsened their earnings forecasts for the following year.
The leaders in the growth of S&P 500 index components were Coty Inc (+7.25%), United Parcel Service Inc (+6.95%), and NVIDIA Corporation shares, which increased by 6.70%. Procter&Gamble Company (+1.42%) and Cisco Systems Inc (+1.22%) were the leaders among Dow Jones components. In comparison, Intel Corporation (-2.29%) was the fallen leader, with its shares continuing to decline after Monday's report.
Famous broadcaster and former fund manager Jim Cramer believes that productivity growth can exceed the price increase if the market can get right with supply chains. It will allow the Federal Reserve to keep interest rates low and allow stocks to rise further.
European stock indices closed with a confident growth yesterday. Germany's DAX increased by 1% to a six-week high, while France's CAC 40 and Britain's FTSE 100 added 0.8% each. Italy's FTSE MIB gained 0.6%, and Spain's IBEX 35 increased by 0.9%. Again the good results of many European companies acted as the growth trigger. Swiss bank UBS Group AG showed a 9% increase in net income, which allowed its shares to gain 1.3% on the report. UK Reckitt Benckiser increased by 5.8% and improved its annual forecast. Meanwhile, shares of French mobile operator Orange fell by 1.7%, while Swiss computer accessory maker Logitech International's stock decreased by 4.3% on the report.
The European Central Bank increased its QE balance again. Total assets rose by another €31.6 billion to a new high of €8,368.3 billion. The European Central Bank will hold a monetary policy meeting on Thursday where the ECB is expected to tighten its policy slowly to contain the euro.
Gasoline prices in Europe are among the highest over the past ten years. At the same time, harsh winter in Europe may lead to further increases in gas prices. According to Bloomberg, Russia wants to lower gas prices for Europe to keep its supply contracts.
Oil prices continued to rise after the American Petroleum Institute report again showed another drop in inventories at a storage center in Cushing, Oklahoma, where supply levels are already at their lowest level since 2018. Weekly crude inventories reserves at 2.318m (previous 3.294m).
Saudi Aramco's CEO said that oil demand is growing, while the extension of free capacities causes a considerable problem. The US will continue to put pressure on OPEC to lower global fuel prices.
Consumer prices in Brazil increased more than expected in October, putting pressure on the central bank to increase the pace of interest rate hikes amid plans to increase government spending. Consumer prices jumped by 1.2% from the previous month.
The Australian dollar increased on Wednesday as unexpectedly strong inflation data raised the prospect of an earlier-than-planned rate hike by the Reserve Bank of Australia.
Main market quotes:
S&P 500 (F) 4,574.79 +8.31 (+0.18%)
Dow Jones 35,756.88 +15.73 (+0.044%)
DAX 15,757.06 +157.83 (+1.01%)
FTSE 100 7,277.62 +54.80 (+0.76%)
USD Index 93.94 +0.12 (+0.13%)
- – Australia Consumer Price Index (m/m) at 03:30 (GMT+3);
- – US Core Durable Goods Orders (m/m) at 15:30 (GMT+3);
- – Canada BOC Monetary Policy Report (m/m) at 17:00 (GMT+3);
- – Canada BOC Interest Rate Decision (m/m) at 17:00 (GMT+3);
- – US Crude Oil Reserves (w/w) at 17:30 (GMT+3);
- – Canada BOC Press Conference at 18:00 (GMT+3).
by , 2021.10.27
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