23.09.202112:14 Forex Analysis & Reviews: Wall Street is euphoric from the fresh comments of the Fed

At the close of trading on Wednesday, the three leading US stock exchange indicators reported growth against the background of the latest signals from the Federal Reserve System (FRS) about the upcoming reduction in asset purchases.

Exchange Rates 23.09.2021 analysis

Thus, the Dow Jones Industrial Average rose by 1% to the level of 34258.32 points. The NASDAQ Composite stock indicator increased by 1.02%, reaching the level of 14,896.85 points. The S&P 500 showed the maximum daily percentage growth since the end of July, jumping by 0.95% to 4,395.64 points.

Exchange Rates 23.09.2021 analysis

According to the decisions taken following the results of the September meeting of the Federal Reserve, there will be a reduction in the monthly volume of bond purchases in the near future. According to the chairman of the regulator, Jerome Powell, the Federal Reserve may announce the beginning of the curtailment of the easing program during the next November meeting. There is a high probability, Powell said, that this will happen if strong statistics on the US labor market are published. At the same time, the curtailment of the asset repurchase program may happen closer to the middle of next year.

In the meantime, the Fed will continue to buy back assets totaling $120 billion every month.

The regulator's interest rate on federal loan funds remained at the same level - from 0% to 0.25% per annum, coinciding with analysts' preliminary forecasts and market participants. At the same time, the increase in the key rate may occur earlier than planned since half of the Central Bank's management members see the need to increase the price of borrowed funds already next year.

By the way, the reaction of experts and market strategists to the comments of the Federal Reserve turned out to be extremely ambiguous. Most of them said that the Fed has returned to the starting point because it did not say when and how much it will curtail incentives. At the same time, experts stressed that the existing financial conditions for the markets are still quite soft.

Shares of the American express delivery service FedEx Corp sank by 9.1% following the company's report on the deterioration of the annual forecast and a decrease in profit by 11% in the first quarter due to higher labor costs.

Securities of Zoom Video Communications Inc, which provides remote conference services, lost 0.1% in price amid interest from the US authorities. So, the American leadership is studying the company's deal to acquire the provider Five9 Inc for a threat to national security. At the same time, the securities of the leading provider of solutions for cloud contact centers Five9 increased by 0.5%.

Shares of the subscription video streaming service Netflix Inc increased by 3.1% on the background of an agreement to purchase Roald Dahl Story Co.

The securities of the popular American food manufacturer General Mills Inc rose by 3.3%. In the first fiscal quarter, the company's revenue increased by 4%, but net profit decreased by 2% amid rising costs.

Irina Maksimova,
Experto analítico de InstaForex
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