The First Slice for Thursday, October 14, 2021

U.S. stocks traded mixed Wednesday afternoon, as investors digested minutes from the Federal Reserve’s last policy meeting that reinforced expectations the central bank will begin tapering its $120 billion a month in bond purchases before year-end.

  • The Dow closed flat 0.0 or -0..53%
  • The S&P 500 rose +13.15 or +0.3%
  • The Nasdaq climbed +105.71 or +0.73%

The blue-chip Dow eked out a gain, snapping a three-session skid, after minutes of the Federal Reserve’s September meeting showed the central bank could start tapering its emergency asset purchases as early as November or December, a sign that the U.S. economy has made a significant recovery from the worst shocks of the pandemic.

Several Fed officials said they even preferred a more rapid reduction of the central bank’s current $120 billion pace of monthly purchases of Treasury and agency mortgage-backed securities, rather than the $15 billion reduction being proposed. 

But benchmark Treasury yields also were lower, pressuring shares of banks that benefit when yields are higher, while providing a boost to technology shares. The 10-year Treasury note fell to 1.549% as investors were parsing third-quarter U.S. corporate earnings, as concerns about supply-chain problems and labor shortages threaten to dent corporate profits.

Wall Street has been weighing a closely watched reading on inflation that came in hotter than expected. 

Data showed that the U.S. consumer-price index rose 0.4% in September after climbing 0.3% in August, the Labor Department said on Wednesday. In the 12 months through September, the CPI increased 5.4% after advancing 5.3% year-over-year in August.

Excluding the volatile food and energy components, the CPI climbed 0.2% after edging up 0.1% in August, the smallest gain in six months. The so-called core CPI rose 4.0% on a year-on-year basis after increasing 4.0% in August.

Higher prices for food, gasoline and rent drove most of the advance. Economists polled by The Wall Street Journal had forecast a 03% increase in the CPI.

Corporations have been increasingly mentioning the impact of pricing pressures on earnings updates and investors have been eagerly listening for guidance from C-suite executives on the outlook for inflation.

  • Shares of tech giant Apple AAPL fell 0.4% after Bloomberg reported late Tuesday that the tech giant will cut iPhone 13 production due to global chip supply shortages. 
  • Shares of Qualcomm Inc. rose 1.7% after the chip maker said its board had authorized $10 billion in share repurchases
  • Shares of Delta Air Lines Inc.  skidded 5.8% after the air carrier reported its first adjusted profit since the COVID-19 pandemic, but said the recent rise in fuel prices will pressure its ability to stay profitable in the fourth quarter. 
  • BlackRock BLK shares climbed 3.8% after the investment giant reported beats on both profit and revenue expectations, and more than 20% growth on assets under management.
  • U.S. oil futures lost steam, with the benchmark closing 0.3% to settle at $80.44 a barrel.
  • Gold futures closed 2% higher to settle at $1,794.70 an ounce.

2 thoughts on “The First Slice for Thursday, October 14, 2021”
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