- Apple and Micron pull the tech industry higher
- The Fed does not expect to have rates raised this year
- Economic slowdown anticipated
Healthy movements were recorded in the tech sector after the Dow locked it down by 216 points with a 3.7 percent hype in Apple offsetting a deceleration of 1.6 percent in J.P Morgan Chase. A heightened S&P 500 closed at 1.1 percent higher, while the Nasdaq outpaced its expectation rising 1.4 percent.
These upsides from Apple were recorded after Needham upgraded the stock to strong buy citing “value upside” in the firms’ environment. Gains on Thursday managed to initiate the stock to break above its 200-day moving average for the first time since November.
Analysts expectations were nullified after quarterly earnings in Micron jumped 9.6 percent. The projections of 3.5 percent lifted VanEck Vectors Sam conductor ETF (SMH) gains.
“There’s been a lot of buying in the tech sector after some good news,” said Ilya Feygin, a senior strategist at WallachBeth Capital. “Tech has definitely been the leader. There’s been a lot of strength coming from there; I think a lot of that is the deployment of cash.”
Investors largely got a boost from the latest policy announcement from the fed after equities got a lift.
On Wednesday the Fed said it does not expect to have rates raised in 2019. Two rate hikes were expected by the central bank back in December. The Fed added that they are planning to end the balance-sheet reduction process by September.
The benchmark 10-year rating hit its lowest after Treasury yields fell sharply on Wednesday. The yield traded at 2.53 percent on Thursday, while the short-term 2-year rate held at 2.41 percent. Yields move inversely to prices.
“Some people assume, rightly or wrongly, that if the Fed is assuring low rates for the foreseeable future, then that is going to force everything else to trade richer from a valuation basis,” WallachBeth’s Feygin said. “That caused some inflows today.”
A possible slowdown in the economy is anticipated after it has emerged that it has however lowered its economic forecast for 2019.
Jeff Kilburg, the CEO of KKM Financial said:
“Fed Chair Powell is causing anguish amongst global investors even though the initial reaction was an instant grab for equities.”
These moves come after a slew of negative commentary from companies like FedEx, BMW, and UBS.
BMW said it is looking to cut $13.6 billion in costs this year while UBS noted the first quarter could be one of its worst ever.