Major U.S. stock indexes rose on Tuesday (14th) amid a rebound in bank stocks.Dow Jones Indexup 1.0%,S&P 500 Indexup 1.4%,NasdaqThe index rose 1.6%,fee halfThe index rose 1.78%.
Before the US stock market, the US Department of Labor announced on Tuesday that CPI in February increased by 6% year-on-year and 0.4% month-on-month, basically in line with expectations. After deducting energy and inflation, the core CPI increased by 5.5% year-on-year and 0.5% month-on-month, roughly in line with market expectations.
The two-year yield, the most rate-sensitive, climbed regarding 30 basis points to 4.27%. The plunge in interest rates caught Wall Street’s attention yesterday when yields fell by more than 50 basis points, the biggest drop since the 1980s.
Affected by the collapse of the Silicon Valley Bank, the market’s expectations for a rate hike by the Federal Reserve in March and this year have been greatly reduced. From the original guess that the rate may be raised by 50 basis points, it has now been reduced to 25 basis points. At the same time, expectations for this year have also been lowered.
Among them, Goldman Sachs predicts that the Federal Reserve will not raise interest rates this month following the collapse of the Silicon Valley bank. Economists at Nomura Holdings went further, saying the Fed might consider a rate cut next week.
Gary Schlossberg, senior economist at Wells Fargo, said that the sell-off in bank stocks “will certainly hinder the Fed from taking aggressive action,” but this may not alleviate concerns regarding inflation, so the Fed will consider more balancing actions.
As of 21:00 on Tuesday, Taipei time:
- Dow Jones IndexUp 324.55 points or 1.02%, tentatively at 32143.69 points
- NasdaqUp 183.16 points or 1.64%, tentatively at 11372.00 points
- The S&P 500 rose 54.87 points, or 1.42%, to 3910.63 points temporarily
- fee halfUp 51.87 points or 1.78%, tentatively reported at 2973.58 points
- TSMC ADR up 0.3% to $88.0 per share
- 10-Year U.S. Treasury YieldUp 5 basis points to 3.62%
- N.Y. Light crude fell 2.55% to $72.89 a barrel
- Brent Crude Oilfell 2.15 percent to $79.03 a barrel
- goldfell 0.3% to $1,910.90 an ounce
- dollar indexdown 0.02% to 103.57
Focus stocks:
First Republic Bank (FRC-US) rose 51.75% to $47.35
Regional banks fell sharply on Monday even as U.S. regulators announced extraordinary measures on Sunday to support all depositors at the now-defunct Silicon Valley Bank (SVB). The SPDR S&P Regional Banks ETF had its worst day since March 2020, falling 12.3%.
First Republic led the decline on Monday, falling 61.8%. Chief Executive Jim Herbert said the bank has not seen significant outflows and is operating as usual. The bank also announced on Sunday (12th) that it has withdrawn from JPMorgan Chase (JPM-US) and the Fed for additional liquidity.
Uber(UBER-US) rose 7.14 percent to $33.02
A California appeals court on Monday (13th) overturned a lower court’s previous ruling, allowing Uber, Lyft (LYFT-US) and other ride-hailing or food-delivery platforms classify its drivers as independent contractors rather than regular employees.
After the news came out, sharing platform stocks collectively rose following hours on Monday, Lyft rose 5.2% following hours, Uber rose 4.8%, DoorDash (DASH-US) up 4%.
“Proposition 22 does not impede the power of the legislature in addressing worker pay, nor does it violate the single-subject rule,” California’s 1st District Court of Appeals said.
United Airlines (UAL-US) fell 6.13 percent to $45.84
United forecast a first-quarter loss due to higher labor and fuel costs, and signaled weaker demand in off-peak months. The company pointed to lower demand in the first two months of the year and weakened ticket pricing power as more seats were available.
United said it expected total revenue per available seat mile to grow 22% to 23% in the first quarter from a year earlier, down from a previous forecast of 25% growth.
Daily key economic data:
- U.S. February CPI annual rate was 6%, forecast 6%, previous value 6.4%
- U.S. February CPI monthly rate of 0.4%, estimated 0.4%, previous value 0.5%
- The core CPI annual rate in the United States in February was 5.5%, estimated at 5.5%, and the previous value was 5.6%
- The core CPI monthly rate in the United States in February was 0.5%, estimated at 0.4%, and the previous value was 0.4%
Wall Street Analysis:
Julian Emanuel, managing director of Evercore ISI, believes that the pressure on the US financial market today is comparable to the 1987 stock market crash, and he expects the market to retest the lows in October last year.
Emanuel said that such stresses in the banking system in the 24 hours following Federal Reserve (Fed) Chairman Jerome Powell hinted that interest rates may be cut by 2 yards (50 basis points) at the 22nd interest rate meeting, indicating that the economic environment is not stable. How serious is certainty.
According to Raymond James analyst Daniel Tamayo, the bank run that led to the collapse of the Silicon Valley bank does not appear to have spread to other banks. In a note to clients on Tuesday, Tamayo said discussions with bank managers in recent days indicated that concerns regarding widespread withdrawals appeared to be overblown.
