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Investors were cheered with a plethora of good surprises on Thursday, triggering a widespread rally that saw all sectors close well in the green.
The kickoff was the latest producer price index – a measure of how much suppliers charge businesses and other customers for their products – which rose 0.5% last month. This was slower than the 0.7% increase in August and also fell short of the 0.6% increase expected by economists.
Prices at the producer level tend to trickle down to consumers, says Jennifer Lee, senior economist at BMO. But while she is “grateful for some relief on the price front, we need a few more months to signal a turning point.”
In other economic news, initial jobless claims last week fell to 293,000 from 329,000 the week before, marking the lowest level of new jobless claimants since March 14, 2020.
Investors also looked at a new batch of corporate earnings reports, with a drugstore chain Alliance of Walgreens boots (WBA, + 7.4%) and insurance giant UnitedHealth Group (UNH, + 4.2%) both up in the wake of this morning’s high and low beats.
At the close, the Dow Jones Industrial Average was up 1.6% to 34,912, the S&P 500 Index was 1.7% higher at 4,438 and the Nasdaq Composite jumped 1.7% to 14,823.
Other stock market news today:
- Small cap Russel 2000 jumped 1.4% to 2,274.
- Bank of America (BAC, + 4.5%) said third-quarter earnings per share jumped 58% year-on-year to 85 cents, while revenue rose 12% to $ 22.87 billion – in part through a $ 1.1 billion cash release that he had previously set aside for credit losses. Piper Sandler analyst Jeffery Harte maintained his overweight (buy) rating following the financial firm’s results. “The strength of income in a still difficult interest rate environment is a clearly positive element,” he said.
- Wells fargo (WFC) was another post-earnings driver, although its shares were down 1.6% on the day. For the third quarter, WFC reported earnings per share of $ 1.22 on revenue of $ 18.83 billion, the double digits beating consensus estimates for 99 cents per share on revenue. of $ 18.35 billion. However, the bank recorded a 5% drop in net interest income compared to the previous year. CFRA analyst Kenneth Leon retained his buy rating on WFC. “We are confident that WFC will achieve a 2021-2022 turnaround that will result in higher returns on capital,” he wrote in a note.
- U.S. crude futures contracts jumped 1.1% to $ 81.31 a barrel – their highest level since October 2014 – after the International Energy Administration (IEA) raised its outlook for global oil demand to this year and next year.
- Gold Futures rose 0.2% to $ 1,797.90 an ounce.
- The CBOE Volatility Index (VIX) dipped 9.6% to 16.86.
- Bitcoin prices gained 1% to $ 57,871.64. (Bitcoin trades 24 hours a day; the prices listed here are at 4 p.m. each trading day.)
Bitcoin ETF Buzz Builds
The exchange-traded fund industry is abuzz about a potential breakthrough for cryptocurrency ETFs.
There are over 20 cryptocurrency funds under review by the Securities and Exchange Commission (SEC), some of which actually hold Bitcoin, and others that are linked to Bitcoin futures.
Dave Abner, global head of business development at the Gemini crypto exchange, notes that “the price of Bitcoin is rallying to rumors of the potential launch of a Bitcoin futures ETF. While this ETF may be successful in raising assets over the next year, generally ETF launches do not have a short-term impact on the prices of the assets they contain. “
But Wall Street is still very excited about the potential for SEC approval, which would open the door to new forms of Bitcoin exposure that investors simply don’t have. Most people who want to invest in Bitcoin and other cryptocurrencies through traditional brokerage accounts have limited options.
They can buy stocks that are related to crypto in one way or another, or they can sort through a mishmash of ETFs and other funds that offer different types of exposure to Bitcoin. While many of these funds stick to stocks involved in cryptocurrency technology, a few names have more direct exposure to digital assets, albeit with a few more twists and turns.
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