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Shares "Jumps" as Fed Chairman Powell talks about interest rates "Only lower" Neutral



Wall Street Overview

Shares rose sharply on Wednesday, November 28, after Federal Reserve Chairman Jerome Powell announced that interest rates "are still low by historical standards" and "will be neutral for the economy, that is, neither acceleration nor slowdown."

Powell spoke Wednesday at the Economic Club in New York.

The Fed chairman also said that the recent sale of the stock market does not create serious risks for the financial system, which indicates that the reduction will not be enough to convince the central bank to give up its impetus to raise interest rates.

“It is important to distinguish between market volatility and events that threaten financial stability,” said Powell. “A large, steady decline in stock prices can put downward pressure on spending and confidence. However, from the point of view of financial stability today, we see no dangerous excesses in the stock market. ”

Before Powell, Donald Trump criticized him and the Fed in an interview with the Washington Post in which he accused the central bank of pushing US stocks to a minimum and causing General Motors Co. to take a decision. (GM) on the closure of five factories in North America and two additional factories outside of North America, and also reduced 15% of their hired labor.

Trump told the Post in an interview that he was not “even slightly pleased with my choice” Powell to head the Federal Reserve, adding that the Fed’s current position on interest rates is “moving away from the base.” Trump's remarks followed a similar interview with The Wall Street Journal in which he accused the central bank of being “a bigger problem than China” and a few hours ahead of a key speech about the monetary policy from Powell on Wednesday in New York .

Shares also rose from reports of a possible breakthrough in US trade negotiations on the eve of the G-20 summit in Argentina.

White House economic adviser Larry Cudlow told reporters that Donald Trump and Chinese Xi Jinping will gather for lunch at the summit on Saturday, December 1. Although he warned that the president of China "has the ability to change the tone and essence of these negotiations," he nevertheless suggested that "President Trump indicated that he is open" to conclude a deal to resolve ongoing trade tensions and possibly stop the new tariff on goods produced by China.

Chinese Ambassador to the United States Cui Tiankai told Reuters that the total trade war between the two largest economies in the world was “unimaginable” and hoped that weekend negotiations could lead to further progress.

The Dow Jones Industrial Average rose 438 points, or 1.77%, to 25,187, the S & P 500 rose 1.48%, and the Nasdaq rose 1.68%.

Gross domestic product in the third quarter grew by 3.5% year on year, unchanged from the previous estimate of the Ministry of Commerce in October. US GDP grew in the second quarter at a rate of 4.2%.

Salesforce.com Inc. (CRM), a cloud-based software company, posted adjusted third-quarter earnings of 61 cents per share, ahead of forecasts by 11 cents, and published strong sales recommendations.

Revenue in this quarter amounted to 3.39 billion dollars. US compared to $ 2.7 billion. A year earlier and exceeded $ 3.37 billion. USA. The stock watch monitor, which is defined as revenue plus a consistent change in the unformed balance of Salesforce, was $ 2.89 billion, which is 28% more than the consensus of $ 2.68 billion.

On Wednesday, shares rose 6.5%.

Salesforce said it expects revenue growth in 2020 to reach $ 16 billion, putting it on the path to achieving the 2022 target range from 21 to 23 billion dollars.

"While the bottom line is a little easier than analysts predicted, we believe that investors should not be misled," wrote Jim Kramer and the Action Alerts PLUS team, which owns Salesforce shares in its portfolio. “Overall, it was a great quarter for the company with a solid blow in all directions. The company has not only surpassed the customer relationship management market again, but also continues to receive a share. ”

Tiffany & Co. (TIF) fell by 11.7% after profit in the third quarter was 77 cents per share, which was in line with analysts' expectations, but sales were $ 1.01 billion, which turned out to be lower than expected. Sales at the same store increased by 2%, but they also missed forecasts.

The jewelry retailer also lowered its forecast for sales growth over the same period throughout the year to an average “average” from the previous guideline for increasing the range “from average to one rank”.

J.M. Smucker Co. (SJM) reported second quarter financial results and sales volumes that missed Wall Street expectations, and the consumer product company cut its fiscal year forecast. Shares fell 6.6%.

Sportswear merchant Dick & # 39; s Sporting Goods Inc. (DKS) earned 39 cents per share in the third quarter, ahead of estimates of 26 cents. Net sales of $ 1.86 billion. US missed forecasts amounted to 1.88 billion dollars. United States, while sales in the same quarter in the quarter decreased by 3.9%, which was narrower than analysts' forecasts, which demanded a decrease of 4%.

Dick raised the estimated range for 2018 to $ 3.15 to $ 3.25 per share from $ 3.2 to $ 3.20.

Inventories decreased by 3%.


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