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Fed rate hike is imminent, Dow Jones closed more than 300 points | Anue Juheng-US stocks

The Federal Reserve (Fed) is imminent to raise interest rates. After Ford issued a supply chain warning, the inversion of the U.S. bond yield curve intensified. The main U.S. stock index opened lower on Tuesday (20th). At the end of the day, it closed more than 300 points in the black, and Apple bucked the trend and closed in the red.

In terms of politics and economy, the U.S. Federal Reserve (Fed) will hold a policy meeting from September 20 to 21. It is expected to announce the results of interest rate decisions in the early morning of the 22nd, Taipei time. Interest rates may not peak until March 2023, when they rise to 4.49%.

The world’s central banks are racing to raise interest rates to fight soaring inflation. Sweden’s central bank unexpectedly raised its policy rate by 4 yards to 1.75% on Tuesday, the biggest move in nearly 30 years. Among the top ten currency management authorities, only two central banks have raised interest rates by a wide margin this year.

While waiting for the decision of the Fed, the inversion of the U.S. bond yield curve has intensified. The U.S. 10-year U.S. Treasury yield is still well above 3.5%, the highest since 2011, and the 2-year U.S. Treasury yield is approaching 4% , the bond market continues to signal a bigger recession.

The U.S. Department of Energy announced on Monday that it would sell up to 10 million barrels of oil from the Strategic Petroleum Reserve (SPR) for delivery in November, as the U.S. dollar strengthened and the crude oil market continued to be under pressure.

UN Secretary-General Antonio Guterres warned the world on Tuesday that a winter of global discontent is approaching in a world plagued by multiple crises ranging from the Ukraine war to climate warming, with countries mired in “enormous global dysfunction” . Guterres stressed that cooperation and dialogue are the only way forward, and that no power or group alone can dictate.

The global epidemic of new coronary pneumonia (COVID-19) continues to spread. Before the deadline, data from Johns Hopkins University in the United States pointed out that the number of confirmed cases worldwide has exceeded 612 million, and the number of deaths has exceeded 6.52 million. More than 12.7 billion vaccine doses have been administered in 184 countries worldwide.

The performance of the four major U.S. stock indexes on Tuesday (20th):
  • The Dow Jones Industrial Average fell 313.45 points, or 1.01%, to 30,706.23.
  • The Nasdaq lost 109.97 points, or 0.95 percent, to end at 11,425.05.
  • The S&P 500 lost 43.96 points, or 1.13 percent, to end at 3,855.93.
  • The Philadelphia semiconductor index fell 38.4 points, or 1.49 percent, to end at 2,539.5.
All 11 major S&P sectors fell, led by real estate, materials and consumer discretionary. (Image: finviz)
Focus stocks

The five kings of technology are only Apple. Apple (AAPL-US) rose 1.57%; Meta (META-US) fell 1.30%; Alphabet (GOOGL-US) fell 1.87%; Amazon (AMZN-US) fell 1.98%; Microsoft (MSFT-US) fell 0.85% .

The Dow Jones components were all but wiped out, with only Boeing and Apple in the red. Boeing (BA-US) rose 0.73%; Nike (NKE-US) fell 4.47%; Pioneer Heavy Industries (CAT-US) fell 2.26%; Home Depot (HD-US) fell 2.23%; Traveller (TRV-US) fell 2.03 %.

The fee and half constituents were generally weak. Intel (INTC-US) fell 1.63%; Micron (MU-US) fell 2.50%; NVIDIA (NVDA-US) fell 1.54%; AMD (AMD-US) fell 1.98%; Applied Materials (AMAT-US) fell 1.78% ; Qualcomm (QCOM-US) fell 1.48%; Texas Instruments (TXN-US) fell 0.11%.

Taiwan stocks ADR collectively closed black. TSMC ADR (TSM-US) fell 0.10%; ASE ADR (ASX-US) fell 0.54%; UMC ADR (UMC-US) fell 2.34%; Chunghwa Telecom ADR (CHT-US) fell 0.96%.

Corporate News

Ford Motor (F-US) tumbled 12.32% to $13.09 a share, its worst one-day performance since January 2011. Ford said on Monday that inflation could lead to an additional $1 billion in costs and that the number of vehicles that were missed due to material shortages was higher than expected.

Apple (AAPL-US) rose 1.57% to $156.90 a share on Tuesday. Tianfeng International Securities analyst Ming-Chi Kuo revealed that Apple’s iPhone 14 Pro models will account for 60-65% of the iPhone 14 series shipments in the second half of 2022, higher than the previous estimate of 55-60%, and the higher-profit iPhone 14 Pro models Is attracting growing demand, may help to improve iPhone revenue and average selling price (ASP).

Ming-Chi Kuo revealed that Apple’s iPhone 14 Pro models will account for 60-65% of iPhone 14 series shipments in the second half of 2022 (Photo: Appleinsider)

Twitter (TWTR-US) inched up 0.048% to $41.68 a share. Tesla (TSLA-US) fell 0.11% to $308.73 per share. Musk, the world’s richest man on Twitter, has the latest development in the legal battle with Twitter. As part of the lawsuit, Musk will be questioned by Twitter’s lawyers next week. The case will officially open on October 17 and last for five years Days to get the results before the October 24 takeover bid expires.

Huida announced a new generation of “Ada” cores, as well as RTX 4090 and RTX 4080 graphics cards, which will use TSMC’s 4N process. However, NVIDIA (NVDA-US) failed to hold on to Tuesday’s intraday gains, with its shares closing 1.54% lower at $131.76 per share with the broader market.

US fast fashion apparel group Gap (GPS-US) slipped 3.26% to $9.21 a share. Gap on Tuesday announced 500 job cuts to reduce expenses amid falling sales and profits.

Witton Electronics (WDC-US) fell 2.95% to $35.54 a share. Deutsche Bank on Tuesday downgraded Witton’s stock rating to “hold” from “buy”, mainly due to deteriorating demand, and Witten’s profit and revenue may be at the lower edge of its forecast.

Economic data
  • The annualized total of new housing starts in the United States in August reported 1.575 million, an estimated 1.445 million, and the previous value of 1.404 million
  • The annualized total number of building permits in the United States in August reported 1.517 million, an estimated 1.604 million, and the previous value of 1.685 million
Wall Street Analysis

Cresset Capital strategist Jack Ablin said: “Investors have priced in a three-point rate hike very well, but there may be concerns that Fed Chairman Powell may be too hawkish in his press conference.”

Peter Cardillo, market economist at Spartan Capital Securities, said: “Traders are very cautious ahead of the Fed’s announcement of the rate decision. The market is jittery due to the indigestion of higher U.S. bond yields.”

“Whether a size 3 rate hike will be the norm for the next few interest rate meetings is what the market is basically worried about, and I don’t expect it to come to size 4, and that’s what the market thinks at the moment,” Cardillo said.

The figures are updated before the deadline, please refer to the actual quotation.

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