2023-12-22 22:11:19
Inflation has slowed more than expected, supporting bets that the Federal Reserve will cut interest rates as early as March. However, Nike fell sharply following it revised down its full-year financial forecast, dampening market sentiment.Dow JonesOn Friday (22nd), it opened slightly higher, then suddenly plunged and turned black in the last two hours of trading. It then pared some of the losses and closed slightly down by nearly 20 points.
After experiencing low-volume trading before the Christmas holiday, the three major U.S. stock indexes closed in the red for the eighth consecutive week, the first time the S&P has done so since 2017.Dow JonesFirst time since 2019. The S&P rose 0.8% this week,Dow JonesIt rose 0.2% on the week.that fingerDuring the same period, it rose 1.2%.
The latest data shows that the core personal consumption expenditures (PCE) price index, the most favored inflation indicator by the Federal Reserve, fell to 3.2% in November, the lowest since April 2021 and lower than market expectations. The PCE price index rose 2.6% year-on-year in November, lower than market expectations of 2.8%.
At the same time, the preliminary monthly rate of U.S. durable goods orders in November was 5.4%, the largest increase since December 2022. Signs of accelerating and slowing inflation have reinforced investor expectations for an earlier and deeper interest rate cut next year.
CME’s FedWatch tool shows an 85% chance of a rate cut in March. Investors currently expect the Federal Reserve to cut interest rates by 7 percentage points before the end of next year, with the range expected to be 3.5% to 3.75%. This is much larger than the three rate cuts expected in 2024 by the Federal Reserve at its December meeting.
Performance of major U.S. stock indexes on Friday (22nd):
- US stocksDow Jones IndexIt fell 18.38 points, or 0.05%, to close at 37,385.97 points.
- NasdaqThe index rose 29.11 points, or 0.19%, to close at 14,992.97 points.
- S&P 500 IndexIt rose 7.88 points, or 0.17%, to close at 4,754.63 points.
- Philadelphia SemiconductorThe index rose 14.27 points, or 0.35%, to close at 4,132.85 points.
- The NYSE FANG + index fell 27.02 points, or 0.31%, to close at 8,728.23 points.
Among the 11 major sectors of the S&P, only the consumer discretionary sector ended in the black, with consumer staples and materials leading the gains. (Image: finviz) Focus Stocks
The five tech kings in the NYSE FANG+ index were mixed. apple (AAPL-US) fell 0.55%; Alphabet (GOOGL-US) rose 0.76%; Meta (META-US) fell 0.20%; Microsoft (MSFT-US) rose 0.28%; Amazon (AMZN-US) fell 0.27%.
Dow JonesAmong constituent stocks, Nike led the decline. Nike (OF THE US) plunged 11.83%; Intel (INTC-US) rose 1.95%; Amgen (AMGN-US) rose 1.73%; Merck (MRK-US) rose 1.23%; Walmart (WMT-US) rose 1.2%.
half feeComponent stocks ended higher. Micron (MU-US) rose 0.59%; AMD (AMD-US) fell 0.22%; Broadcom (AVGO-US) fell 0.47%; Qualcomm (QCOM-US) rose 0.74%; Huida (NVDA-US) fell 0.33%; Applied Materials (AMAT-US) rose 0.41%; Deyi (TXN-US) rose 0.86%.
Taiwan stock ADRs surged upward. TSMC ADR (TSM-US) rose 0.59%; ASE ADR (ASX-US) rose 0.88%; UMC ADR (UMC-US) rose 0.63%; Chunghwa Telecom ADR (CHT-US) rose 0.45%.
Corporate News
Nike (OF THE US) plunged 11.83% to $108.04 per share. Citing factors such as cautious consumer spending, Nike lowered its full-year financial forecast and announced a plan to cut costs by US$2 billion over the next three years, including reducing the number of key product licenses to control costs.
Influenced by Nike, Foot Locker (FL-US) fell 3.93%, Under Armor (UAA-US) fell 3.34%, Lululemon (LULU-US) fell 0.20% and other footwear and apparel manufacturing stocks fell.
Tencent (TCEHY-US) fell 9.84% and NetEase (NTES-US) down 16.07%. Other U.S.-listed Chinese concept stocks also fell, including Alibaba (BABA-US) and Pinduoduo (PDD-US)。
Tesla (TSLA-US) fell 0.77% to $252.54 per share. The National Highway Traffic Safety Administration (NHTSA) said on Friday that Tesla (TSLA-US) is recalling 120,423 vehicles in the United States because the doors may become unlocked in a crash. The recall involves Model S and Model X cars produced from 2021 to 2023. NHTSA also said that Tesla has released an OTA software update to solve the problem.
Economic data
- The U.S. PCE price index in November reported an annual rate of 2.6%, expected 2.8%, and the previous value of 2.9%
- The U.S. PCE price index in November reported a monthly rate of 0.1%, expected to be 0.2%, and the previous value was 0.2%.
- The annual rate of the PCE core price index in the United States in November was 3.2%, which was expected to be 3.3% and the previous value was 3.4%.
- The PCE core price index in the United States in November reported a monthly rate of 0.1%, which was expected to be 0.2% and the previous value was 0.1%.
- The initial monthly rate of U.S. durable goods orders in November was at 5.4%, expected to be 1.7%, and the previous value was -5.1%
- The final value of the U.S. Consumer Confidence Index in December was 69.7, which was expected to be 69.4 and the previous value was 61.3
Wall Street Analysis
Greg Bassuk, CEO of AXS Investments, said: “The personal consumption expenditure data that the Fed will focus on in its review of inflation further solidifies the moderating trajectory of inflation. We believe this is another catalyst for investor excitement today, and the economy is soft landing. It seems closer to certainty.”
“This highlights the breadth and depth of this holiday season rebound, which we believe bodes well for investors heading into 2024,” Bassuk said.
Miller Value Partners analyst John Spallanzani commented: “Basically, the trend is investors’ friend, and the current trend in the stock market is upward. Small and mid-cap stocks really welcome the Fed’s easing policy.”
Juheng Warm Reminder: December 25 (Monday) is the Christmas holiday in the United States, and U.S. stocks and U.S. bonds will be closed for one day.
The figures are all updated before the deadline, please refer to the actual quotation.
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