Wall Street reacts little to Fed minutes and closes weaker. In addition to the Fed announcement, investors are also concerned with mixed figures from the retail sector. The buying mood is subdued.
Wall Street investors took profits. Retail data and the Fed minutes were on the agenda. The Dow Jones index dropped 0.5 percent to 33,980 points. The S
The Fed minutes were read slightly dovishly in an immediate reaction. The currency watchdogs said that they expect a continuous increase in the key interest rate. But they also pointed out that a slowdown in interest rate hikes “at some point” is appropriate. Stock indexes edged up slightly, the dollar fell a little, but it didn’t last. At this meeting, the Fed raised interest rates by 75 basis points for the second time in a row. However, inflation has slowed since the minutes.
The second main topic was mixed figures from the retail trade, which dampened the mood to buy. On Tuesday, better-than-expected second-quarter results and encouraging outlook from retailers Walmart and Home Depot had allayed fears that high inflation could hurt Americans’ willingness to spend. However, with the quarterly reports of home depot competitor Lowe’s and supermarket chain Target, new doubts were raised on Wednesday.
The data on retail sales provided an impression of how the industry as a whole is doing. These stagnated in July on a monthly basis. Economists had forecast growth to slow to 0.1 percent from 1.0 percent in June. However, excluding sales of motor vehicles, growth of 0.4 percent was recorded. Here, the economists agreed that sales would remain unchanged. Inventories, meanwhile, rose within the expected range in June.
Target shares lost 2.6 percent. The company had to discount heavily in the second quarter, causing profit to shrink more than expected. The number card from Lowe’s contains light and shadow (plus 0.6 percent). The home improvement chain earned better-than-expected earnings for the quarter and is now confident of reaching the upper end of the guidance range for full-year profit. For revenue, however, Lowe’s is only expecting the lower end after it fell in the quarter and missed expectations.
Tesla shares were down 0.8 percent. Tesla CEO Elon Musk has once again made headlines with a tweet, this time announcing the purchase of football club Manchester United, only to say hours later it was a hoax. However, that did not stop investors from accessing “ManUnited”. The stock rose 7 percent.
Investors increasingly sold government bonds, despite the losses on the stock market. As a result, yields increased significantly. Yields gave up some of their gains with the Fed minutes, particularly at the short end, which is more sensitive to monetary policy.
The dollar held its ground against the euro at the level reached the previous day. The dollar index gained 0.1 percent. Gains were recorded in the oil market. Supporting this was the official data from the Energy Information Administration on crude oil inventories, which showed a massive decrease. The industry association API had already reported reduced stocks the evening before. The price of gold fell significantly. Rising bond yields put pressure on the precious metal.
