Markets Witness Stock Rally before Fed Meeting on September 16
(Continued from Prior Part)
Rise in stocks across all sectors
September 16 saw a rally of stocks across all sectors. Investors were confident that day that the Fed wouldn’t go for a rate hike during its afternoon meeting. Investors pointed to a 0.1% fall in the Consumer Price Index in August, the first drop this year. The volatile situation in the Chinese stock market and its economic slowdown were other factors that could delay a rate hike.
The above graph shows the rise in the sectors of the SPDR S&P 500 ETF (SPY).
Molson Coors believed to benefit from Anheuser-Busch/SABMiller tie-up
Molson Coors Brewing (TAP) has been rated outperform by the analyst at Cowen. The stock surged 14.23% on September 16 after the announcement by Anheuser-Busch InBev (BUD) of its intention to take over SABMiller. Now TAP has an opportunity to buy SABMiller’s stake in its US joint venture MillerCoors formed in 2008. Acquiring this stake in MillerCoors would give TAP a strategical control over its operations in the beer market. It will also help TAP obtain cost efficiencies.
The other top gainers of the SPDR S&P 500 ETF (SPY) on September 16 were Chesapeake Energy (CHK) and Apache (APA). Stocks from the independent oil and gas industry returned 14.07% and 6.46%, respectively.
CHK is said to gain on the grounds of rising oil prices. The company is very ambitious and has accelerated its production despite the current market supply. The move is considered bold by many analysts. However, the US crude oil inventory is expected to fall.
The analyst at Zacks has rated Apache (APA) as “hold” for the short term. Three Wall Street analysts have rated it a “buy,” 12 have rated it a “hold,” and one has rated it a “sell.”
The stocks at the bottom on September 16 were FedEx (FDX), Frontier Communications (FTR), and Level 3 Communications (LVLT). The stocks yielded -2.84%, -2.63%, and -2.44%, respectively, that day.
Let’s take a glimpse at the UK stock market ahead of the Fed’s meeting.
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