U.S. Stock Markets and the Dollar Benefit from Fed Announcements

  •   30/07/2020 - 15h33
  •   HARMANT Adeline

During yesterday's session, it seems that investors on the New York Stock Exchange were reassured and seduced by the final monetary policy statement of the Federal Reserve, which appeared at 8pm last night and was once again very accommodating. Let's come back together on this news and on the announcements made by the Fed.

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U.S. Stock Markets and the Dollar Benefit from Fed Announcements

Rise of the main stock market indices following the announcements of the Fed :

The major U.S. stock market indices ended yesterday's session on the upside, although it did not mark the day's high. However, these indices closed above expectations of a pre-opening market.

More precisely, the Dow Jones index thus climbed 0.65%, the S&P 500 index gained 1.25% and the Nasdaq 100 also took 1.5%, thanks in particular to the significant rise of the AMD stock which gained 12.5% in one session. One also notes a rise of 2.1 points of the Russell 2000 index in particular thanks to the 320% rise of the Kodak stock which almost reached $60.

Of course, it is mainly the Fed's announcements that have boosted market optimism. The Federal Reserve thus decided to maintain zero rates until the U.S. economy returns to its initial health. However, this is not expected to happen before 2023 or even later depending on market sentiment. The Fed will continue to provide the U.S. government, businesses and individuals with credit at least until the end of 2020.

The agency also saw a slight improvement in employment, although not as strong as hoped.

One will also retain some interesting statistics also released yesterday including the American trade deficit which contracts to 70.64 billion dollars against 75.3 billion dollars during the month of May. Wholesale inventories are down 2% and retail inventories are down 2.6%.

 

Update on other stocks to follow in the US market :

Although the main US financial markets benefited from the Federal Reserve's announcements and its policy of supporting the economy, this event did not have the expected effect on the dollar, which continues to lose points against the euro with a fall of 0.8% at the end of the session and reaching a new annual low at 1.1805 pips, which is intended to boost export values.

The barrel of WTI oil remains relatively stable despite an unexpected drop of 10 million barrels in weekly inventories. This shows just a very slight increase of 0.70% towards $41.30 a barrel.

However, we notice a rebound of some oil stocks like Range with +6.1%, Valero with +5%, Devon with +4.6%, Occidental with +4.2% or Hess with +3.9%.

On the downside we find Seagate with a loss of 8.8%, General Electric down 4.4%, eBay down 3.2% and the Boeing share which fell 2.8% after announced losses of more than 2.4 billion dollars.