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S&P 500 Rallies, Avoids Tantrum Even as Fed Tees Up November Taper

Stock MarketsSep 22, 2021 04:08PM ET
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© Reuters.

By Yasin Ebrahim

Investing.com – The S&P 500 rallied Wednesday, shrugging off the Federal Reserve's signal that tapering of its bond purchases could get underway as soon as November.      

The S&P 500 rose 1%, the Dow Jones Industrial Average gained 1.1%, or 338 points, the Nasdaq climbed 1%.

“If progress continues broadly as expected, the Committee judges that a moderation in the pace of asset purchases may soon be warranted,” the Fed said in a statement.

Fed Chair Jerome Powell later signaled the taper could get underway in November, and end in mid-2022.  “Participants generally view, so long as the recovery remains on track, a gradual tapering process that concludes around the middle of next year is likely to be appropriate,” Powell said in a press conference that followed the monetary policy statement. 

Leading up to the meeting, however, many analysts were betting on a November taper, and suggested that the announcement was priced in.     

Cyclical sectors including energy climbed more than 3%, underpinned by rising oil prices following data showing weekly U.S. oil supplies fell by a more than expected last week.

Crude oil inventories fell by 4.7 million barrels last week, compared with analysts' expectations for a draw of 2.4 million barrels.

Sentiment on oil has also been supported by “news that the OPEC countries of Nigeria and Angola, and OPEC+ member Kazakhstan, have lasting difficulties expanding their production due to a lack of investment,” Commerzbank (DE:CBKG) said in a note.

In a further boost to sentiment on cyclical stocks - those that move in tandem with the economy - China contagion fears subsided after Evergrande agreed to settle interest payments on a domestic bond on Wednesday, and the central of China pumped further liquidity into the financial system.

In big tech, meanwhile, Facebook (NASDAQ:FB), down 4%, proved a drag on the sector after the social media giant warned that Apple (NASDAQ:AAPL) ad-tracking would hurt growth.

In earnings news, Adobe and FedEx were among the major names in the spotlight. 

Adobe Systems (NASDAQ:ADBE) reported third-quarter results that beat on both the top and bottom lines, but slowing growth in its core digital media business weighed the tech company’s shares.

“Adobe reported mixed F3Q results that exceeded consensus estimates on both top and bottom line offset by the core Digital Media ARR missing expectations,” Oppenheimer said in a note.

FedEx (NYSE:FDX) cut its outlook on full-year performance after reporting quarter profit that fell short of estimates, sending its shares more than 9% lower

S&P 500 Rallies, Avoids Tantrum Even as Fed Tees Up November Taper
 

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Comments (19)
Basher Basher
Basher Basher Sep 27, 2021 11:17AM ET
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Nice Very nice
George Pichurov
George Pichurov Sep 23, 2021 12:07AM ET
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How do you expect tantrum when the worry was wether FED starts tapering in September. Which they are not sure even about November.
Alina khan
alina47 Sep 22, 2021 10:44PM ET
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it's short term bounce for the dollar and long team decline I thought.......?
Ron Raymond
Ron Raymond Sep 22, 2021 10:44PM ET
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Dollar bought as safe haven initially at least, bad for trade though, dollar will eventually collaspe as US finanicial disaster shows its ugly head and deepest recession in history begins with 20% drop in market eventually 75 or more, only ricjh and poor then US dollar will be taken away as World currency, rise of EU and China, starvation here, etc. will seriously begin by 2035 or before.
Zen Cat
LittleZenCat Sep 22, 2021 9:15PM ET
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tapering likely is the short term bounce for the dollars long term decline.
ZS Beck
ZS Beck Sep 22, 2021 8:49PM ET
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October taper, November taper, December taper, Never taper. Why can you just accept it, and move on? Every week the same story.
Kapil Baldawa
Kapil Baldawa Sep 22, 2021 8:24PM ET
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US Financial mkts led by FED are going to ruin this world forever. High time people start to look beyond US like how they are now looking last China.. FED will ensure 1929 would be forgotten for 2021/2022.. worse than covid situation
Nick Burns
Nick Burns Sep 22, 2021 8:24PM ET
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at least we are only here for a brief moment in time
Millennial Metals
Millennial Metals Sep 22, 2021 8:10PM ET
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Imagine trusting the federal reserve LOL
Peter Bozich
Peter Bozich Sep 22, 2021 7:17PM ET
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Dont get the VAX
William Bailey
William Bailey Sep 22, 2021 6:51PM ET
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Party just starting for shorts!!!
Chris Ru
Chris Ru Sep 22, 2021 6:41PM ET
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just keep kicking the can down the road
New Jazenevd
New Jazenevd Sep 22, 2021 5:49PM ET
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The market is fine; money printing continues anyway.
me ish
me ish Sep 22, 2021 5:41PM ET
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So the mainstream news is saying "nothing to see here - all is fine" But tonight and into tomorrow, we'll see a large sell off again.
pr pr
pr pr Sep 22, 2021 5:41PM ET
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Suit yourself believing that. The buy is strong on this 100 bounce
Nick Burns
Nick Burns Sep 22, 2021 5:41PM ET
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friday maybe
Mitchel Pioneer
Mitchel Pioneer Sep 22, 2021 5:41PM ET
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Quite a criminal show today by the laughingstock of the financial world.  Line flagrantly drawn at 34,250 to ensure all losses were vanquished.  Can't have the biggest investment JOKE in the world in the red.  More fraud to come, with an encore on Friday, as America is sent into another weekend with a financial knife in their back.  How high can they fraudulently inflate average holdings in retirement/pension plans?
Empire Destroyer
Empire Destroyer Sep 22, 2021 5:41PM ET
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Hehe you comment each time but I bet you longed 🤣
Trading Life Stlye
Trading Life Stlye Sep 22, 2021 5:02PM ET
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alot of double talk from pow pow. hes too soft, need someone with a backbone
Prakash J Chaudhari
Prakash J Chaudhari Sep 22, 2021 4:32PM ET
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4th industrial revolution is happeneing NOW . GO for IOT, 3D , AR, AI , Biotech , Green stocks .
harsh visharia
harsh visharia Sep 22, 2021 4:32PM ET
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what would happen to market when they start selling $120 billion securities per month instead of buying it? this shows how weak the economy is, economy isnt producing surplus, instead it needs to sell assets to FED to survive.
Nick Burns
Nick Burns Sep 22, 2021 4:32PM ET
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depends on who they sell it to and how much they are willing to pay the same price for it... seems as though if its to other large institutions that want to take on the securities that the fed paid up for to keep the markets floating the reciprocation will just allow the markets to not really lose that much of a step after moving a little down and sideways... everyone is waiting for some 50% correction or something but  that seems unlikely.
Jamie An
Jamie An Sep 22, 2021 4:21PM ET
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They did almost nothing in this meeting, and I think we need new chair someone hawkish.
Heine Pedersen
Heine Pedersen Sep 22, 2021 4:21PM ET
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Wealth transfere the American way.. Average Joe will soon become Broke Joe.. While billionaires laugh at them from there secret hideout in Space.. "Suckers!"
Jamie An
Jamie An Sep 22, 2021 4:21PM ET
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They did almost nothing in this meeting, and I think we need new chair someone hawkish.
Heine Pedersen
Heine Pedersen Sep 22, 2021 4:21PM ET
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Completely like the last 2-3 meetings. Just talk.. zero action
 
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