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Latest Fed meeting minutes calmed down Wall Street

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Wall Street stock exchanges ended Wednesday trading session with gains with the investors focused on the latest Fed’s meeting minutes and the ECB meeting.

The blue-chip index Dow Jones Industrial Average added 9 points, or less than 0.1%, to a level of 26,196 points. The broader S&P 500 returned to growth after on Tuesday ended its eight-day winning streak. The technology index Nasdaq Composite advanced by 0.7% to 7,964.60 points.

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According to the analysts, the investors are encouraged to take risks because they are convinced that central bankers will support them.

The Fed’s March meeting minutes showed that the central bank is still expecting a recovery in the economy later this year, although it admits that global growth concerns have led it to reject its plans to raise interest rates this year. Earlier, the comments by the ECB President Mario Draghi outlined the European Central Bank’s willingness and ability to ease politics if the outlook for the eurozone worsens.

The focus of investors was also the data on the US Consumer Price Index for March, which rose by 0.4%.

Signs of a slowdown in global economic growth continue to worry some investors, while the first-quarter reporting season will start later this week. In the coming weeks, S&P 500 companies are expected to report their first year-on-year drop in quarterly earnings since 2016. Some investors consider whether the decline is temporary or part of a wider trend as wages and other costs are rising.

The US 10-Year Treasury yields dropped in the wake of the minutes, ending the day down nearly 1% to 2.477%.

Corporate stocks performance

Lyft Inc declined by 10%, as Uber’s plans for initial public offering seem to overshadow Lyft’s IPO from March. Lyft’s stock price is down 7.4%, trading at a price of 62.74 USD per share.

Banks, which are vulnerable to falling yields, remained resilient. JPMorgan, Citigroup and Goldman Sachs ended the day higher. CEOs of America’s largest banks were testifying on Capitol Hill Wednesday about how the industry has transformed in the 10 years following the financial crisis.

Advanced Micro Devices (AMD) was up by 2.2%, on the back of a bullish update from Wall Street ahead of the chipmaker’s results due April 14. S.G. Cowen raised its price target on AMD to 33 USD from 28 USD, citing increased confidence in the chipmaker’s competitive position against rival Intel. AMD’s near-term product launches will “inflect in the second half of the year, showing early signs of long-term EPS and revenue power”, added Cowen.

Delta Air Lines stock soared 12% last week after the company raised its outlook for the first quarter and announced that it had extended its lucrative credit card partnership with American Express all the way to 2029.

The best performers of the session on the Dow Jones Industrial Average were Goldman Sachs Group Inc (+1.18%), Cisco Systems Inc (+1.16%) and Walmart Inc (+0.92%). However, the session was negative for Boeing Co, which wiped out 1.11% of its market capitalization. Among other losers were UnitedHealth Group (-1.11%) and Dow Inc (-1.00%).

The best performers in S&P 500 were ConAgra Foods (+6.72%), Discovery (+6.07%) and Kroger (+4.3%), while on the opposite side were AmerisourceBergen (-4.4%), Humana (-2.96%) and Fox (-2.6%).

Corporate earnings reports

LVMH Moët Hennessy Louis Vuitton reported its latest earnings today, and once again the company delivered another quarter of double-digit growth. The French luxury group posted an increase of 16% for the first quarter of 2019 compared with the same period last year, with total revenues for the quarter totaling over 14 billion USD. The business group with the biggest increase percentage was the fashion and leather goods division, which posted a 20% increase (15% on an organic basis). Overall, the company said, all geographic regions are experiencing good growth, which would presumably qualm any lingering fears of a Chinese slowdown that analysts cautioned about.

Delta Air Lines reported earnings per share of 0.96 USD for its fiscal first quarter of the year. This is an increase over its earnings per share of 0.74 USD from the same time last year. Delta Air Lines earnings for its fiscal first quarter of 2019 also includes net income of 730 million USD. The airline company’s net income from the first quarter of 2018 was 557 million USD. Operating income reported in the Delta Air Lines earnings release for the first quarter of the year was 1.02 billion USD. This is better than the company’s operating income of 844 million USD from the same period of the year prior. The revenue for the quarter is 10.47 billion USD.