Thursday 4th November 2021
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U.S. stock markets changed marginally after the Federal Reserve announced the beginning of its tapering of its asset purchases by $15 billion later in November. The Dow Jones Industrial Average declined 0.19%, while the S&P 500 index and the Nasdaq Composite index rose 0.53% and 0.91%, respectively. All three of the major averages finished at record highs on Tuesday with the Dow closing above 36,000 for the first time. The markets expect the first Fed interest rate hike to occur in July 2022. It would appear the Fed will adopt a very measured approach to the reductions of its net asset purchases, but “it is prepared to adjust the pace of purchases, if warranted by changes in the economic outlook” according to the central bank’s open committee. The ADP employment report showed private sector payrolls had increased by 571,000 workers surpassing the 400,000 new jobs analysts were expecting. The yield on the 10-year note was up two basis points at 1.57% following the Fed's decision.
West Texas Intermediate crude oil dropped $2.82 to $81.09 a barrel and gold slid $25.10 to $1,763.60 an ounce. Other key overseas markets were mostly lower, France’s CAC 40 up 0.34% and Germany’s DAX 30 increasing marginally 0.03% while Britain’s FTSE 100 fell 0.36%. China’s Shanghai Composite slipped 0.2% and Hong Kong’s Hang Seng index fell 0.3%. Japan’s Nikkei 225 closed for a holiday.
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