The stock markets in the United States gained driven by several including the report from the Federal Reserve that the economy expanded over the past two months.
The Federal Reserve Beige Book indicated that four of the 12 districts reported “moderate” growth and three districts experienced “modest” expansion. Other Fed districts reported that their pace of growth varied from “slight” to “mixed”. The Dallas Fed district reported a slowdown.
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The Federal Reserve said, “Manufacturing activity generally held steady or increased over the reporting period. Most districts reported an uptick in retail spending, and outlooks were positive with retailers expecting continued sales growth in 2015.”
The central bank also reported that the employment levels slightly increased across districts. Most districts also reported that wages rose slightly.
The equity markets also benefited from investors’ speculation that Greece will reach an agreement with the International Monetary Fund (IMF) and the leaders of the European Union.
Robert Pavlik, chief market strategist at Boston Private Wealth, told Bloomberg, “The market is under the assumption that something is going to get done in Greece. When the market holds up, people drive money back into stocks, and we’re still in an upward trajectory. U.S. equities still have upside potential.”
Meanwhile, European Central Bank (ECB) President Mario Draghi said the $1.2 trillion stimulus program is supporting the Eurozone’s economic recovery. The ECB increased its inflation forecast from zero to 0.3% this year.
Draghi said the central bank’s stimulus “contributed to a broad-based easing of financial conditions. The effects of these measures are working their way through to the economy. We expect the economic recovery to broaden,”
- Dow Jones Industrial Average (DJIA) – 18,076.27 (+0.36%)
- S&P 500- 2,114.07 (+0.21%)
- NASDAQ- 5,099.23 (+0.45%)
- Russell 2000- 1,264.22 (+0.99%)
- EURO STOXX 50 Price EUR- 3,583.82 (+0.62%)
- FTSE 100 Index- 6,950.46 (+0.32%)
- Deutsche Borse AG German Stock Index DAX- 11,419.62 (+0.80%)
- Nikkei 225- 20,473.51 (-0.34%)
- Hong Kong Hang Seng Index- 27,657.48 (+0.69%)
- Shanghai Shenzhen CSI 300 Index- 5,144.65 (-0.34%)
Stocks in Focus
Ardelyx, a clinical stage biopharmaceutical company gained almost 40% to $14.95 per share. The company regained its rights to its portfolio of NHE3 inhibitors including Tenapor after entering into a termination agreement with AztraZeneca.
The stock price of Ocean Rig UDW declined almost 13% to $7.04 per share. The company announced an offering of its common stock. Ocean Rig Chairman and CEO George Economou intends to purchase shares in the public offering to maintain his direct ownership of approximately 5% of the company’s common stock.
The shares of Vera Bradley dropped 13% to $12.30 per share after reporting financial results for the first quarter that missed consensus estimates. The company posted a net income of $0.1 million and net revenues of $101.1 million.