The Federal Reserve keeps its fiscal policy unchanged and a jump in the oil and stock markets

2021-09-23T17:33:19
Federal Reserve jump in the oil stock markets
...

The Federal Reserve keeps its fiscal policy unchanged and a jump in the oil and stock markets

The Federal Reserve keeps its fiscal policy unchanged and a jump in the oil and stock markets:

The Fed published the results of its meeting yesterday, in which it announced that its fiscal policy would remain unchanged. 

Evest follows developments in the trading markets around the world in the following report:

 

Topics:

Results of the Federal Reserve Board meeting in September

Positive signs on Wall Street

Asian stock exchanges are following Wall Street

Expected Data

Oil market status

Results of the Federal Reserve Board meeting in September

After the September 21-22 meeting, the United States Federal Reserve announced that the interest rate (0-0.25% per year) would not be changed,
as well as continuing to buy back assets for a total of $120 billion on a monthly basis
(including US Treasuries in the amount of $80 billion and mortgage bonds worth $40 billion).

Results published at the end of the meeting showed that 9 of the 18 leaders of the United States Central Bank expect a base rate increase in 2022,
three of whom believed that the rate would rise twice next year. 

The Fed cut its 2021 US GDP growth forecast to 5.9% from the 7% forecast in June,
and in 2022 it rose to 3.8% from 3.3%.

Expectations for the consumer price growth rate (personal consumption expenditure index) rose this year to 4.2% from 3.4% next year – to 2.2% from 2.1%.

Fed Chairman Jerome Powell said at a press conference that the Fed may announce the start of a reduction in the asset buyback program at the next meeting in November,
and the asset buyback program is likely to be completed by midday the next day. 

Powell said the Fed could “easily” start cutting back on asset purchases early in November in the case of strong labor market data.

Positive signs on Wall Street

In the United States, stock indices rose by 1% on Wednesday, after the results of the September meeting of the Federal Reserve System.

US stock index futures rose during early morning trading on Thursday after the Federal Reserve board kept benchmark interest rates unchanged,
while indicating no immediate intention to remove stimulus policies.

Dow Jones industrial index futures gained 105 points.

Futures for the Standard & Poor’s 500 index and the Nasdaq 100 were traded in a positive zone.

Stocks closed higher in all areas during regular trading following the central bank’s suspension.

The Dow Jones index gained nearly 340 points, or 1%, in its first positive session in five days, the best day since July 20.

However, after advancing by more than 500 points at one point,
the benchmark of 30 stocks closed below its highest level during the day. 

The Standard & Poor’s index advanced by 0.95%, also cutting a four-day loss streak and recording its best day since July 23.

The Nasdaq Composite Index ended the session up 1.02% higher, while the Russell 2000 outperformed the session, up 1.48%.

Asian stock exchanges are following Wall Street

Stock index growth also prevailed in Asia (the Japanese stock exchanges were closed due to the autumn equinox holiday,
China’s Shanghai Composite index rose by 0.4%, and the Hong Kong Hang Seng Index – by 1%).

The market has also been supported by some easing of concerns about the financial problems
of Chinese development company China Evergrande Group, according to the Wall Street Journal.

On Monday, the company defaulted on loan payments to at least two banks.

In the meantime, a major section in Evergrande confirmed on Wednesday that interest payments on domestic bonds will be paid on time.

The company will pay investors 232 million yuan ($35.9 million) on Thursday.

Evergrande Xu Jiayin’s Chairman stated on Thursday that the company’s top priority is to help investors profit from the developer’s products.

However, it remained unclear whether the company will pay $83.5 million in interest on five-year dollar bonds,
a question that worries foreign investors the most.

Expected Data

Preliminary business indices in various countries will be published on Thursday.

The Bank of England, which is holding its meeting, will have to react in some way to rising inflation in August,
although the interest rate decision is unlikely to be too hasty. 

In addition, in the United States, the Federal Reserve Bank’s National Activity Index will be issued in Chicago,
and traditional weekly data on initial unemployment benefit claims will be published. 

The composite index of US business activity could rise to 58.3 points in September from 55.4 points in August.

Next comes the index of the United States’ Leading Economic indices. 

Oil market status

On the oil market, prices continued to rise Thursday morning following the publication of the United States Department of Energy report
on the eve of the country’s oil reserves falling to their lowest level since 2018.

Brent crude futures’ cost for November was $76.27 per barrel (+ 0.1٪ and + 2.5٪ on Wednesday),
and West Texas Intermediate crude for November was $72.31 per barrel (+ 0.1٪ and + 2.5% on Wednesday).

According to the United States Department of Energy,
the country’s oil reserves fell last week by 3.48 million barrels (to 413.96 million barrels),
with a forecast for a reduction of 2.45-3.8 million. 

Inventories at the terminal in Cushing, Oklahoma,
where oil traded on the New York Stock Exchange is stored, fell by 1.7 million barrels.

Royal Dutch Shell announced on Wednesday the reopening of a major pipeline transporting Mars crude
from the Gulf of Mexico to refineries on the Louisiana coast.

Market attention turns to the problem of lack of natural gas supplies, particularly in Europe,
which may affect the energy complex as a whole in winter, Bloomberg writes. 

Goldman Sachs expects oil prices to rise to $90 per barrel.

The Federal Reserve keeps its fiscal policy unchanged and a jump in the oil and stock markets

brandfooter