Att. Messrs. Subscribers,
The previously published note contained an inaccuracy. At the close, the S&P 500 index retreated 0.32%, to 4,682.94 points, not as stated. Here’s a corrected version:
New York stock exchanges closed without a single sign today, in a session with great attention to the appointment of the President of the United States, Joe Biden, of Jerome Powell for another term at the head of the Federal Reserve (Fed), which alleviated part of the uncertainties of investors. The indices operated most of the day on the positive side, with the exception of the Nasdaq, but strong pressure in the last minutes of the trading session put pressure on the shares. Among the standouts, bank stocks had some of the biggest gains of the session, while the rise in Treasuries yields put pressure on the tech sector.
The Dow Jones closed up 0.05% at 35,619.25 points, the S&P 500 retreated 0.32% at 4,682.94 points, while the Nasdaq dropped 1.26% at 15,854.76 points.
“US equities are rising while the Fed’s continuity remains,” points out Edward Moya, an analyst at Oanda. According to Rabobank, Powell is seen as less dovish than the other possibility, Lael Brainard, and has a less rigid approach to regulation. Furthermore, the Dutch bank notes that while Biden is pursuing expansive left-wing fiscal policies to redistribute income, its nominee will maintain a monetary policy approach that is increasing inequality.
According to Moya, finance stocks rose after Biden’s decision, as Brainard took the second-highest job at the Fed rather than vice president of oversight. “This does not indicate that the banks are clean, as they may see an even tighter regulator being announced soon,” the analyst points out. Bank of America (+1.96%), Goldman Sachs (+2.23%), JPMorgan (+2.12%) and Wells Fargo (+3.11%) advanced. Another sector with important advances was oil, amid the advance of the barrel and moves by the American government to try to contain the final price of fuel. Occidental Petroleum (+3.06%), Chevron (+1.79%) and ExxonMobil (+1.38%) advanced.
Technology stocks had significant losses, including Facebook (-1.24%), Amazon (-2.83%) and Netflix (-2.89%). In addition to the advance in interest rates, an important drop in bitcoin also pressured some securities, such as Coinbase, which fell 5.13%. One exception was Tesla, which rose 1.74% after company CEO Elon Musk announced that the Model S Plaid would go on sale in China around March 2022.
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