The stock markets in the United States rebounded drive by the Federal Reserve’s statement that it will keep the interest rates near zero for a considerable time.
Policy makers expressed concern regarding the weakening global outlook and the strong dollar. According to them, if the dollar strengthens further, it could slow inflation and harm certain portion of the U.S. economy.
2020 Letter: Kerrisdale Outlines Long Thesis For This ESG Tech Stock
Sahm Adrangi's Kerrisdale Capital was up 6.5% for the fourth quarter, including a decline of 0.3% in October and gains of 3.2% and 3.5% for November and December, respectively. For comparison, the S&P 500 gained 12.2% during the fourth quarter, while the Barclay Hedge Fund Index was up 9.3%. Q4 2020 hedge fund letters, conferences Read More
Yesterday, the International Monetary Fund (IMF) reduced its 2015 global growth estimate to 3.8% from 4% due to the persistent weakness in the euro area and the slowdown of several emerging market economies.
The international organization estimated that global economic growth remained at 3.3% this year. The IMF emphasized that the global recovery remain fragile and uneven.
The minutes of the meeting of the Federal Open Market Committee (FOMC) indicated that the expansion “might be slower than expected if foreign economic growth came in weaker than anticipated.” Policy makers promised to maintain the interest rates near zero for a “considerable time” following the completion of its bond-buying program this month.
“Some participants saw the current forward guidance as appropriate in light of risk-management considerations, which suggested that it would be prudent to err on the side of patience while awaiting further evidence of sustained progress toward the committee’s goals,” according to the FOMC minutes.
In a phone interview with Bloomberg, John Canally, an economic strategist at LPL Financial commented, “The Fed is telling us if they raise rates it’s because of a good economy. If you’re up on stocks it’s because it’s more of the same from the Fed, not lurching closer to a rate hike.”
- Dow Jones Industrial Average (DJIA)- 16,994.22 (+1.64%)
- S&P 500- 1,968.89 (+1.75%)
- NASDAQ- 4,468.59 (+1.90%)
- Russell 2000- 1,095.93 (+1.82%)
- EURO STOXX 50 Price EUR- 3,053.31 (-0.93%)
- FTSE 100 Index- 6,482.24 (-0.21%)
- Deutsche Borse AG German Stock Index DAX- 8,995.33 (-1.00%)
- Nikkei 225- 15,595.98 (-1.19%)
- Hong Kong Hang Seng Index- 23,263.33 (-0.68%)
- Shanghai Shenzhen CSI 300 Index- 2,478.38 (+1.12%)
Stocks in Focus
The stock price of Costco Wholesale Corporation (NASDAQ:COST) gained more nearly 3% to $128.65 per share after reporting better than expected fourth-quarter financial results. The company said its net sales climbed 9% to $34.75 billion. Its net income increased to $697 million or $1.58 per diluted share from $617 million or $1.40 per diluted share.
The shares of Sears Holdings Corp (NASDAQ:SHLD) dropped almost 5% to $28.85 per share on report that three of the insurance firms covering the suppliers of the retailer wants to reduce their coverage. As a result, one of the vendors cancelled its shipments to Sears, according to a person familiar with the situation.
Symantec Corporation (NASDAQ:SYMC) gained almost 4% to $24.01 per share on report that the company is considering the idea of breaking its business into two entities.