Wall Street Starts Stronger & Dow Rises 200 Points Prior to Fed on China Aid
Today, economic markets in the United States began the day stronger, but for the most part, it was a question of ‘stop and observe’ as the Federal Reserve finished its current policy debate. With the aid of an abstractly written announcement by real estate developer China Evergrande, the company was able to escape what many consider to be an inescapable collapse by saying that it had negotiated a deal with creditors who were due to receive interest charges on Thursday. It did not allude to any more loan repayments that will be due in the future.
Mortgage lending grew by 4.9 percent weekly, offering additional evidence of the housing market’s ongoing strength. The existing-home sales statistics for August are anticipated to be announced at 10 a.m. ET. Once the Dow Jones Industrial Average opened at 9:35 a.m. ET (13:35 GMT), it had gained 201 points, or 0.6 percent, to stand at 34,121 points. The S&P 500 was up 0.4 percent, while the Nasdaq Composite was up 0.2 percent on the day.
Stock Movements
Investors are warily awaiting the release of the Federal Reserve’s statement, and the equity market is rising. UBS Chief Economist Paul Donovan says “U.S. equity prices are beginning to reflect a more relaxed view of the prospect of an impending collapse by a Chinese property developer, which would have relatively modest macroeconomic repercussions outside of China. People should think about the price of assets in the long term because they are important.”
Investing saw a rise in the overall market, but major single-stock movements were trending downward, as it appeared that reports on company earnings and financial metrics fed a developing idea of sluggish development and increased charges that will pressure profit growth. FedEx stock has fallen 7.5% following the recent caution about greater prices over time, while Adobe shares dropped 4.6% after the results of the company’s third-quarter financial results, which exceeded expectations but still projected a diminished “virus outbreak driven economic growth urge” that had lasted for about one year and a half.
As a result of several Wall Street Journal articles critical of Facebook’s leadership, the company’s shares slipped 2.7 percent on Monday. The stock is down 7% since the very first of this set of articles was published. Apple iOS operating system changes are hurting the firm’s advertising revenue, too.
Looking at the big picture, the value of Stitch Fix improved 16% after the company announced a return to positive operating cash flow, whereas Uber’s share price advanced after the company reported an expected increase in earnings before interest, taxes, depreciation, and amortization. Stocks rose 3.9% at the end of the day, putting them in their highest level in over two months.
Evergrande has stolen the focus away from the FOMC this week so far, but this afternoon’s discussion will be all about trimming and the dot chart, according to the agenda.
