London, Thursday, 14 October 2021 -
Wall Street rallied more than 1.5% on Thursday, reclaiming the green arrows after the losses at the beginning of Q3. Major driver for the rally was investors’ shift to the economic outlook and strong earnings.
Dow Jones: +1.6%
S&P 500: +1.7% - best performance since March
Nasdaq: +1.7%
Financials led the way, with major Wall Street banks beating market forecasts; Citigroup, Wells Fargo, Bank of America and Morgan Stanley among them. Back of America did stand out, up more than 4%, reporting, for Q3, record advisory and asset management fees.
In the meantime, a significant component of Dow Jones, UnitedHealth Group Incorporated (NYSE:UNH), beat the expected quarterly results as its Optum drug benefits division soared. Its stock was up more than 4%.
Big tech stocks such as Microsoft, Apple, Facebook and Alphabet, benefited from the US 10-year Treasury note drop, below 1.52%.
Other chip stocks including NVIDIA (NASDAQ: NVDA) Marvell Technology (NASDAQ: MRVL) and ASML (NASDAQ: ASML) were up more than 3%, pushing the iShares Semiconductor ETF (NASDAQ:SOXX) up nearly 3%.
Meanwhile, fresh economic data provided additional support with initial jobless claims falling to a new pandemic-low and producer inflation rising less than expected. Initial jobless claims in the US fell to 293,000 last week, marking the first time that figure was below 300,000 since the early days of the Covid-19 pandemic on March 14, 2020, according to the Labour Department.
Now, the central bank could start tapering as early as mid-November, the Fed implied that this might happen in mid-December, which would potentially add one more month of liquidity in the markets.
The news pushed the blue-chip Dow Jones up 374 points, or 1.1%, to 34,751 at 9.46 a.m. EDT, while the S&P 500 rose 47, or 1.08%, to 4,410.
The tech-heavy Nasdaq jumped 175 points, or 1.2%, to 14,746.
Rising risk appetite created downward pressure on the VIX volatility index, as the fear index plummeted 6.6% to 17.40.
The dollar index declined 0.14% to 93.95, while the yield on 10-year US Treasury notes decreased 0.78% to 1.537%.
However, crude prices remained on the rise again. International benchmark Brent crude was at $83.75 with a 0.7% gain and US benchmark West Texas Intermediate was at $80.83, a 0.5% increase.
Precious metals continued to increase with gold adding 0.14% to $1,795 per ounce and silver increasing 0.8% to $23.28.
Bitcoin rose 4.8% to $57,370.
In other crypto news, Coinbase Global (NASDAQ:COIN) soared 5% as cryptocurrencies rallied. The cryptocurrency exchanged also unveiled a proposal urging Congress to pass legislation to create new regulator to govern crypto exchanges.
Under the proposal, the regulator would have the authority to approve any cryptocurrencies beyond bitcoin and ether for listing or trading in the U.S.
In Europe, stock markets closed with gains.
All major indices in Europe closed in positive territory Thursday.
STOXX Europe 600: +5.3%
FTSE 100: +0.92%
DAX 30: +1.4%
CAC 40: +1.3%
FTSE MIB 30: +1.23%
IBEX 35: +0.49%
(Written and edited by: The Decision Maker)