As market concerns regarding the pace of inflation and monetary tightening subsided, U.S. stocks opened higher on Thursday (7th), TSMC ADR rose more than 6%, and the ADP employment data, which was originally scheduled to be released today, was due to Suspended publication due to improvements in compilation methodology. On the other hand, China’s massive economic stimulus package boosted commodity prices across the board.
Before the deadline,Dow Jones Industrial Averageup nearly 300 points or nearly 1%,Nasdaq Composite Indexrose more than 150 points or nearly 1.4%,S&P 500 Indexrose nearly 1.1%,Philadelphia SemiconductorThe index rose nearly 3.7 percent.
In terms of economic data, in order to provide a more robust and high-frequency labor market and economic growth forecast report, ADP, the US automatic data processing company, will improve the current compilation method of the ADP employment data report, so it will suspend the release of the July employment report. And plans to release a new US national employment report on August 31.
The number of Americans filing initial jobless claims edged up to 235,000 last week, beating market expectations of 230,000, suggesting a tightening labor market is easing.
The U.S. Treasury market was mixed,10-year Treasury yieldOn the rise, 2-year yields fell, reversing the trend of the past few days when short-term bond yields surged on inflation bets, while longer-term bond yields were capped on concerns of an economic slowdown.
Over the past two weeks, fears of runaway inflation and the possibility of a U.S. recession have swirled among investors. The drop in oil prices reassured investors regarding the pace of necessary tightening, even as the minutes of the Federal Reserve’s June meeting showed policymakers’ determination to keep raising interest rates.
A surge in Samsung’s revenue eased concerns regarding weak consumer demand and soaring raw material costs, driving a rebound in chip stocks and pushing the MSCI Asia-Pacific index up more than 1 percent. However, Chinese tech stocks fell following Shanghai reported its highest number of coronavirus infections since late May.
Meanwhile, China’s Ministry of Finance is considering allowing local governments to issue shares this yearRMB 1.5 trillion yuan (regarding $220 billion) in special bonds to accelerate infrastructure financing at an unprecedented pace.
In other news, British Prime Minister Boris Johnson announced his resignation as leader of the Conservative Party today, saying the process of electing a new leader will begin immediately, with a timetable to be announced next week. After the news came out,GBPgo higher.
On the energy front, U.S. West Texas (WTI) crude oil futures may fall as much as 9% for the week, as investors weigh the possibility of a global economic slowdown amid signs that spot markets remain tight.
In addition, oil and gas giant Shell (SHEL-US) reversed a whopping $4.5 billion in write-downs during the pandemic, a move that will cushion the company’s balance sheet from the Russian government’s seizure of the Sakhalin 2 gas project, also showing an optimistic view of the oil market.
As of 21:00 on Thursday (7th) Taipei time:
Stocks in focus:
Seagen (SGEN-US) rose 1.99% to $178.62 a share in early trade
Merck, the US pharmaceutical giant, plans to acquire Seagen, a biotech company specializing in cancer. It is rumored that it is still in the negotiation stage, and is negotiating at a price of more than 200 US dollars per share, and the total value of mergers and acquisitions may exceed 40 billion US dollars. The two companies aim to finalize the merger before Merck & Co. reports its second-quarter earnings on July 28, or even earlier.
Virgin Galactic (SPCE-US) rose 7.11% to $6.9 a share in early trade
Virgin Galactic, the space tourism company, has announced a partnership with Boeing (BA-US) subsidiary Aurora Flight Sciences reached an agreement to build two additional spacecraft to support its upcoming launch mission. Virgin Galactic currently has a spacecraft called VMS Eve, which has been in use for regarding 14 years and is undergoing a lengthy refurbishment, and the new spacecraft is an upgraded version of VMS Eve that will be used in up to 200 times a year. launch mission. However, a Virgin Galactic spokesman did not disclose the financial terms of the deal.
GameStop(GME-US) rose 9.84% to $128.99 a share in early trade
Shares of meme stock GameStop rose nearly 5 percent in premarket trading on Thursday, as the company announced a 4-for-1 stock split in an attempt to revive its appeal to retail investors amid a market sell-off. However, AJ Bell investment director Russ Mould warned that a stock split would not change the company’s fundamentals, “I’m not at all surprised to see more and more management teams accepting stock splits, they’re just trying to create new share price momentum. But in the long run, fundamentals will be more important than surface issues like that.”
Today’s key economic data:
- U.S. challenger companies reported 32,500 layoffs in June, down from 20,700
- U.S. initial jobless claims reported 235,000 last week, 230,000 expected, and 231,000 unrevised
- The number of people receiving unemployment benefits in the United States last week reported 1.375 million, 1.327 million is expected, and the previous value was 1.324 million following revision
- U.S. May trade balance reported – $85.5 billion, expected – $84.9 billion, previous value – $87.08 billion
Wall Street Analysis:
Global equities rebounded as pressure points such as interest rates, oil prices and the U.S. dollar began to ease, said Stephen Innes, managing partner at SPI Asset Management. Also, the situation improved following Samsung’s revenue beat estimates, with the tech-heavy benchmark outperforming expectations.
Kevin Thozet, a member of the investment committee at asset manager Carmignac, said U.S. economic data showed slowing growth, but not an imminent recession. He said the market may be overstating the risk of a recession or that it is coming very quickly, and investors are turning to utilities such as pharmaceuticals, which are less sensitive to an economic downturn.
The big question for financial markets, ING analysts said, is whether a worsening growth outlook will trigger a shortening of the tightening cycle — particularly the Fed’s.
