Important points to watch on U.S. stocks:
This week the market will focus on the Fed’s interest rate decision. The U.S. 10-year Treasury bond yield reached 4.347%. U.S. stock futures rose on Monday (18th), with Dow Jones futures rising 0.07%, S&P 500 futures rising 0.11%, and Nasdaq 100 futures rising 0.15%.
The Fed will announce its September interest rate decision at 2 a.m. Taiwan time on Thursday (21st), followed by Fed Chairman Jerome Powell, who will hold a press conference on the monetary policy decision at 2:30. The market estimates that interest rates may remain unchanged at 5.25%-5.5%. However, given last week’s economic data report showed that inflation is accelerating and the job market is strong, interest rates may be raised again this year.
Rubeela Farooqi, chief U.S. economist at High Frequency Economics, said last week’s inflation report supported the Federal Open Market Committee (FOMC) in keeping interest rates unchanged this week. As for the future policy path, relevant factors such as inflation, the labor market, and the delayed and accumulated effects of previous tightening of monetary policy will all be taken into consideration, which will help determine whether the Fed has completed raising interest rates or will raise interest rates further. The FOMC is currently expected to keep interest rates unchanged until the end of the year.
According to CME’s FedWatch tool, the market expects a 99% chance that the Fed will keep interest rates unchanged this week.
However, a survey of many well-known economists showed that the Fed may break the current expectations of market investors. More than 40% of the respondents said they expected the Fed to raise interest rates from the current 5.25%-5.5% level. Rate hikes 2 or more times. Nearly half of the economists surveyed predicted that the federal funds rate will reach a high of 5.5% to 5.75%, indicating that interest rates will rise another 0.25 percentage point. Another 35% expect interest rates to rise to a high of 5.75% to 6%. A small majority (8%) think interest rates will exceed 6%.
The U.S. stock market has risen better than expected this year, prompting strategists from many major Wall Street banks to begin to face up to their wrong predictions and raise their year-end target prices for the S&P 500 Index.
Manish Kabra, head of U.S. equity strategy at Societe Generale, last week raised his year-end price target for the S&P 500 to 4,750 points from 4,300 points, 25% higher than his original forecast of 3,800 points.
Michael Kantrowitz, chief investment strategist at Piper Sandler & Co., and Greg Boutle, head of U.S. equity and derivatives strategy at BNP Paribas SA, originally set price targets of 3,225 and 3,400, the lowest among forecasters. , but they have also recently raised their year-end target prices to keep up with the 15.9% rise in U.S. stocks so far this year.
Mike Wilson, chief U.S. stock strategist at Morgan Stanley, who once predicted a sharp decline in U.S. stocks in 2022, also admitted in July that he had been bearish on the stock market for too long. However, he still expects U.S. stocks to fall by more than 10% before the end of the year.
U.S. stocks rose or fell on the previous trading day:
- The Dow Jones Industrial Average fell 288.87 points, or 0.83%, to close at 34,618.24 points.
- The Nasdaq fell 217.72 points, or 1.56%, to close at 13,708.33 points.
- The S&P 500 fell 54.78 points, or 1.22%, to close at 4,450.32 points.
- The Philadelphia Semiconductor Index fell 107.84 points, or 3.01%, to close at 3,476.39 points.
Today’s important economic data:
- US September NAHB housing market index, estimated 50, previous value 50
Important stock trends:
Wedbush analyst Daniel Ives said that Apple (AAPL-US) launched the iPhone 15 last week, and the market received an enthusiastic early response. He rated Apple stock as “outperform” with a target price of $240.
Ives said in a report that iPhone 15 pre-orders, which started last Friday, were well above consensus expectations. Citing Wedbush analysis, he said pre-orders were up about 10-12% from last year’s iPhone 14 pre-orders.
For SoftBank CEO Masayoshi Son, the successful listing of chip design company Arm (ARM-US) has promptly replenished the investment “ammunition arsenal”, and the next main front has been determined – artificial intelligence (AI).
According to a report by the British Financial Times on Saturday (16th), people familiar with the matter revealed that after Arm’s listing, Masayoshi Son is seeking to invest tens of billions of dollars in the field of AI, and OpenAI is one of the potential investment targets. Sources said that Masayoshi Son is also considering investing in competitors of OpenAI and intends to acquire British AI chip manufacturer Graphcore.