After the U.S. Federal Reserve (Fed) announced a 3-yard (75 basis point) interest rate hike as scheduled yesterday, many central banks around the world have joined the ranks of tightening monetary policy, curbing soaring inflation at the expense of economic growth, while U.S. Treasury yields The continuous rise to new highs also exacerbated the inversion trend of yield rates, and the major U.S. stock indexes all fell on Thursday (22nd).
Before the deadline, the Dow Jones Industrial Average fell nearly 140 points or nearly 0.5%, the Nasdaq Composite fell nearly 110 points or nearly 1%, the S&P 500 fell nearly 0.7%, and the Philadelphia Semiconductor Index fell more than 1.6%.
The Swiss National Bank announced a 3-yard rate hike on Thursday, Norway and the UK raised interest rates by 2 yards (50 basis points), with the Bank of England raising rates for the second time in a row by 2 yards, while Switzerland was in sync with the Fed, bringing its borrowing costs to an end. 8 years of negative interest rate policy, while Norway hinted that its tightening policy may be nearing an end.
At the same time, U.S. Treasury yields climbed. U.S. two-year Treasury yields have breached the 4% mark in a row, exacerbating an inversion of the yield curve, signaling a recession warning. At the time of writing, U.S. two-year yields were at 4.09%, while 10-year yields were at 3.595%.
The Fed has sent its clearest signal yet that it is willing to tolerate a recession as the necessary price to get back on inflation. Fed officials also hinted that in order to fight inflation, interest rates will continue to be raised well beyond current levels, by another 5 yards (1.25 percentage points) by the end of this year, reaching 4.25% to 4.5%, and the “terminal rate” will be 2023. reached 4.6%. The dot plot and shows that officials do not see a rate cut until 2024.
In terms of data, the number of Americans receiving initial unemployment benefits last week was 213,000, an increase of 5,000 from the previous revised 208,000, which was lower than market expectations of 218,000, and a slight increase from a near 4-month low. Despite the uncertain economic outlook and the Fed’s efforts to tighten monetary policy, the labor market remains healthy for labor demand.
In terms of individual stocks, U.S. electric car maker Tesla (TSLA-US) will recall nearly 1.1 million vehicles in the United States because its automatic window reversal system cannot respond correctly when it detects obstacles, increasing injuries risk.
Tesla’s recall includes the Model 3 from 2017 to 2022, the Model Y from 2020 to 2021, and the Model S and Model X from 2021 to 2022.
It is worth noting that FedEx (FDX-US), known as the “economic wind direction ball”, will announce its latest quarterly earnings report after the US stock market on Thursday. The stock previously withdrew its forecast and indicated that the economy may enter a recession. The stock price plummeted to a record. In addition, Costco (COST-US) will also report after-hours earnings on the same day.
In other news, EU foreign ministers held an emergency meeting late at night in New York yesterday after Moscow announced local mobilization, which escalated the Ukrainian-Russian war, and will prepare to impose a new round of sanctions on Russia.
As of 21:00 on Thursday (22nd) Taipei time:
Stocks in focus:
Novavax (NVAX-US) fell 9.43% to $23.43 a share in early trade
New crown vaccine maker Novavax was downgraded by JPMorgan Chase, downgrading its stock from “neutral” to “underweight”, citing reduced vaccine demand and other factors, and Novavax’s recent financial cut The degree of measurement may not be enough.
Salesforce (CRM-US) rose 2.28% to $150.99 a share in early trade
Shares of Salesforce, the global leader in cloud customer relationship management software, rose more than 2 percent in premarket trading after the company released its latest interim performance target at its 2022 investor day. Salesforce said it is targeting $50 billion in revenue in fiscal 2026 (a 17% compound annual growth rate); adjusted operating margins are targeting 25%-plus, including future mergers and acquisitions. As for short-term goals, Salesforce forecasts fiscal 2023 revenue of $30.9 billion to $31 billion.
Eli Lilly (LLY-US) rose 1.92% to $302.17 a share in early trade
Eli Lilly has been approved by the U.S. Food and Drug Administration (FDA) for a new use of its cancer drug Retevmo. At the same time, Lilly was also favored by UBS, which upgraded its stock rating from “neutral” to “buy” (Buy). UBS is optimistic for many reasons, one of which is Lilly’s weight loss drug “Tirzeeptide” “The risk is reduced.
Today’s key economic data:
- The number of Americans receiving unemployment benefits last week reported 213,000, expected 218,000, the previous value of 208,000
- The number of people receiving unemployment benefits in the United States reported 1.379 million last week, 1.4 million is expected, and the previous value was 1.401 million
- The monthly rate of the US leading index in August was -0.3%, expected -0.1%, the previous value – 0.5%
- U.S. September Kansas Fed composite manufacturing index reported 1, expected 5, the previous value of 3
- US September Kansas Fed manufacturing index reported 2, the previous value – 9
Wall Street Analysis:
Seema Shah, chief strategist at Principal Global Investors, said: “Powell is acknowledging that growth will be below trend for a while, which should be interpreted as the Fed talking about a recession. The situation It will be more difficult in the future.”
Gurpreet Gill, global fixed-income macro strategist at Goldman Sachs Asset Management, said Fed officials appear to be increasingly supportive of pushing monetary policy further into restrictive territory to prevent high inflation from becoming entrenched. Since World War II, the Fed has declined within two years in 11 of 14 tightening cycles.
Greg Bassuk, chief executive of AXS Investments, said the Fed’s actions, combined with continued roller-coaster market volatility, underscore investors’ economic and market uncertainty amid high inflation, corporate earnings warnings, geopolitical concerns and other factors weighing heavily on Wall Street. Feeling disturbed in sexually enlarged situations.