Investors faced a host of headwinds, with a poor outlook for tech stocks further dampening sentiment. US stocks were weak in early trading on Friday (29th).Dow Jones Industrial Averagedown 0.28%,S&P 500 Indexdown 0.92%,NasdaqThe index fell 1.2%,half feeIt fell 1.4%.
Amazon (AMZN-US) and other major technology stocks released earnings after the market on Thursday, and their unsatisfactory outlook for the second quarter hit their share price performance. Amazon fell 10% after the opening bell, leading the decline in U.S. technology stocks.
Aside from corporate earnings, investors remain concerned about slowing global growth, rising inflation, a strict lockdown in China due to the coronavirus outbreak and monetary tightening by the U.S. Federal Reserve, all of which are all headwinds for equities.
The U.S. Commerce Department released data on Thursday showing that U.S. gross domestic product fell by an unexpected 1.4% year-on-year in the first quarter, far less than analysts’ expectations for a 1% increase. While consumer and business demand remained strong, recession fears persisted despite data misleading due to a widening trade deficit and slowing inventory growth.
Markets are still grappling with how much the Fed will raise interest rates, with a 50 basis point rate hike basically expected next week, without much change from this week’s data.
As of Friday 21:00 Taipei time:
- Dow JonesDown 94.37 points 0.28%, temporarily reported 33822.02 points
- NasdaqDown 155 points or 1.21%, temporarily reported 12716.02 points
- S&P 500 fell 39.4 points, or 0.92%, to 4248.07
- half feeDown 43 points or 1.4%, temporarily reported 3013.2 points
- TSMC ADR fell 1.23% to $94.05 per share
- 10-year U.S. Treasury yieldup 7 basis points to 2.89%
- NY Light crude rose 1.15% to $106.57 a barrel
- Brent CrudeUp 1.79% to $109.52 a barrel
- goldUp 1.2 percent to $1,913.7 an ounce
- US dollar indexDown 0.42% to 103.24
Stocks in focus:
apple (AAPL-US) rose 0.22% to $164.0
Apple reported earnings for the second quarter of its 2022 fiscal year after the bell on Thursday. Driven by strong demand for iPhones and digital services, revenue hit a record high for the same period and announced plans for treasury shares and an additional dividend. But executives warned that supply chain bottlenecks stemming from the coronavirus lockdown could dent revenue by as much as $8 billion this quarter.
Apple said the lockdown measures that have affected China in recent weeks have affected shipments of some key devices.
Amazon (AMZN-US) fell 10.75% to $2,580.91
Amazon on Thursday reported a weaker-than-expected profit in the first quarter of its 2022 fiscal year, and its second-quarter revenue forecast also missed analysts’ estimates.
In the first quarter, Amazon’s revenue grew only 7% annually, a sharp drop from the 44% annual growth rate in the same period last year, setting the lowest single-quarter revenue growth rate since the dotcom bubble in 2001. Single digit percentage.
Robinhood (HOOD-US) fell 2.67% to $9.82
Robinhood posted a bigger-than-expected loss and shrinking revenue in the first quarter, a sign that the retail-trading boom that captivated Wall Street a year ago may have lost steam.
“Our large customers remained active, but customers with lower balances declined more significantly,” CEO Vlad Tenev said on a conference call with investors and analysts. “Due to the uncertainty in the stock market, Our clients have become more cautious about their portfolios.”
Daily key economic data:
- US March PCE price index increased by 6.6%, expected 6.7%, the previous value of 6.4%
- U.S. core PCE price index rose 5.2% y/y in March, expected 5.3%, and the previous value of 5.3%
- US March PCE price index rose 0.9%, expected 0.9%, the previous value of 0.5%
- U.S. core PCE price index rose 0.3% in March, expected 0.3%, and the previous value of 0.3%
- U.S. personal consumption expenditures increased 1.1% in March, expected 0.6%, and the previous value was 0.6%
Wall Street Analysis:
Michael Shaoul, chairman of Marketfield Asset Management, believes that the current market performance is likely to change from a long and painful “correction” to a more troubling one. Compared with the rapid rise after the sharp fall in March 2020, it seems that the time for the fall is now. Possibly longer, becoming a “crawling bear”.
Randy Frederick, head of trading and derivatives at Schwab Center for Financial Research, pointed out that the fact that the stock market has fallen has shown that demand is slowing, and further interest rate hikes in the future will also slow demand. Companies that need to borrow will continue to struggle, even as the cost of borrowing becomes higher.