The US markets have regained some of the sharp downturns from the beginning of today’s session, following the news that the Federal Reserve may tighten monetary policy slower than expected. The US central bank is considering whether to signal at its meeting next month that it will take a “wait and see” approach in raising key interest rates.
The blue-chip index Dow Jones Industrial Average ended the session with a decrease of only 77 points after earlier dropped by almost 800 points. The broader S&P 500 index slid by 0.15%, but during the session entered into correction territory, decreasing by 10% from its 52-week peak.
The technological index Nasdaq Composite also recovered its earlier losses and ended with decrease 0.4% of its value after Amazon, Netflix and Alphabet rose by more than 1%.
The stocks of Apple fell by 2.5% after UBS said in a comment that it saw the weakest iPhone’s “buying intent” in five years. The bank lowered its 12-month target price for Apple’s shares from 225 USD to 210 USD.
Broadcom shares rose more than 5% after hours. The company beat revenue expectations, posting 5.44 billion USD versus analyst estimates of 5.39 billion USD. It also earned 5.85 USD per share, beating estimates of 5.58 USD per share.
The bond yields fell on bond markets as investors continue to give up riskier assets because of concerns about the US-China trade tension and possible economic slowdown. The yield on 30-year government bonds reached 3.136%, and the returns on 10-year Treasuries fell to 2.87%.
In the forex markets, the dollar was negatively affected by its main competitors against weak bond markets and Fed news.
The dollar index, which measures its value of the greenback against six other currencies, decreased by 0.29% to 96.79 points.
Federal reserve monetary policy
Federal Reserve Chairman Jerome Powell signaled that the three-year cycle of policy tightening is about to be completed, and central bankers look for signs of global growth slowdown as well as trying to see how the US-China trade war will affect of the US economy.
According to information from US factories, prices are rising as tariffs lead to higher production costs.
Economic activity in the US continues to expand, as the labor market continues to tighten and wages and prices are rising, according to the Fed’s “Beige Book”. Most of the 12 areas monitored by the Fed indicate that their economies are growing at a moderate pace, although four regions indicate that growth has declined or been “weak”.
The employers have created 250,000 jobs in October, which is above the average monthly figures in recent years. The unemployment remains stable at 3.7%, remaining at the 49-year low.
Salaries have risen by 3.1% YoY in October, the highest annual growth in average hourly wages in 2009.
Tax cuts at the end of 2017 and rising government spending supported to boost the Fed’s prospects for the economy earlier this year. But recent market turmoil and trade disputes have led Fed officials to be unsure about the pace of tightening monetary policy next year.
The US telecommunications equipment company Comtech Telecommunications reported strong net sales for the first quarter of fiscal 2019 of 160.8 million USD, against 121.6 million USD achieved during the first quarter of fiscal 2018. Thus, the company is increasing its fiscal 2019 consolidated net sales goal to a range of approximately 625.0 million USD to 640.0 million USD. The adjusted EBITDA in the first quarter of fiscal 2019 was 18.0 million USD.
The semiconductor company Broadcom reported better-than-expected fourth-quarter financial results on Thursday. The shares of the chipmaker soared 6% in after-hours trade after beating on both the top and bottom lines. Broadcom earned 5.85 USD per share versus the 5.56 USD per share analysts were anticipating. The revenue also beat expectations at 5.45 billion USD.
American Outdoor Brands also beat analyst expectations for earnings and revenue. The company posted 161.7 million USD in revenue. Analysts were expecting 154.1 million USD. It also beat earnings estimates of 0.14 USD per share, reporting 0.20 USD per share.
Verint Systems came out with quarterly earnings of 0.85 USD per share, beating the consensus estimate of 0.71 USD per share. This compares to earnings of 0.66 USD per share a year ago.