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21.10.202114:28 Forex Analysis & Reviews: US stock indicators showed mainly growth

Exchange Rates 21.10.2021 analysis

US stock indicators showed mostly growth at the close of exchanges on Wednesday. The DJIA industrial indicator increased by 0.43%, the broad S&P 500 - by 0.37%, while the NASDAQ indicator showed a minimal decline of 0.05%.

Positive data from companies' financial reports for the third quarter contributed to the optimistic mood on American stock exchanges. The reports indicate that the shortage of labor and the increase in the cost of raw materials cannot seriously affect companies' profits. Over the past year and a half, companies have learned to be flexible and adapt quickly to new market conditions.

The report released by the Fed yesterday showed that the increase in economic activity in the previous two months was at a restrained and moderate pace. Supply problems and a shortage of labor contributed to this, which ultimately slowed economic growth and increased inflation.

The negative aspect was the increase in the yield of US Treasury bonds. Thus, the interest rate increased to 1.673%. It is a record figure for the last six months. The increase in the profitability of government bonds makes the securities of companies less attractive in the eyes of investors, especially against the background of high stock prices.

More than others, this factor impacts the securities of high-tech companies since they lay down opportunities for rapid income growth in the value of shares. In the situation of raising government bond rates, possible profits look less worthwhile.

So, the stock price of Netflix Inc. decreased by 2.2%, despite an increase in the number of new users and good reporting for the third quarter. Nevertheless, the company's expected earnings in the fourth quarter somewhat upset investors. At the same time, the securities of Verizon Communications Inc. rose 2.4% on the back of a 45% increase in profit for the third quarter. However, analysts predicted a greater rise in the company's profits.

Among the Dow Jones index components, the largest increase in the value of shares was shown, in addition to Verizon Communications Inc., UnitedHealth Group Inc. (+2.52%), and The Travelers Companies Inc. (+2.12%). Shares of McDonald's Corp. companies fell more than others. (-1.26%) and Visa Inc. Class A (-0,90%).

Among the components of the S&P 500 indicator, Anthem Inc. (+7.7%), People's United Financial Inc. (+5.85%), M&T Bank Corp. (+5.78%) gained more than others in the price. Securities of Baker Hughes Co., PayPal Holdings Inc., and NASDAQ Inc. fell by 5.66%, 4.91%, and 4.64%, respectively. The value of Pinterest Inc. securities increased by 12.8% due to information that PayPal Holdings plans to buy Pinterest Inc.

Among the components of the NASDAQ indicator, the largest price increase was achieved by Xiaobai Maimai Inc. (+98.42%), Sesen Bio Inc. (+25.7%), Management Co., Ltd. (+22.66%). At the same time, Vinco Ventures Inc. lost more than others in the price, which fell by 17.99%, Grove Inc. – by 15.45%, ALJ Regional Holdings Inc. – by 15.38%.

Stock quotes of Novavax Inc. decreased by 14.8% due to data on difficulties encountered in the production of coronavirus vaccination. At the same time, Abbott Laboratories' securities gained 3.3% thanks to a strong report for the third quarter, which exceeded experts' expectations.

In general, on the New York Stock Exchange, the number of shares that have increased in price (2184) has exceeded the number of those that have fallen in price (1007). Similarly, the situation has developed on the NASDAQ stock exchange: the number of shares that have risen in price (2039) significantly exceeded the number of those who lost in price (1529).

The volatility index decreased by 1.34%, to the lowest level for the month at 15.49.

Gold futures rose 0.74% to reach $1,783.65 per troy ounce. WTI crude futures increased by 1.19% to $83.42 per barrel, while Brent crude futures rose by 0.85% and stopped at $85.80 per barrel.

Anastasia Kravtsova,
Analytical expert of InstaForex
© 2007-2021
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