2023-05-23 21:09:48
The debt ceiling negotiations have made little progress, and investors are increasingly worried regarding the US default. US stocks fell on Tuesday (23rd). Technology stocks were at the bottom of the list. Affected by the rising pressure on U.S. bond yields, technology giants such as Apple and Microsoft led the decline, and retail stocks were also sluggish.That fingerS&P andfee halfThe index closed more than 1% black,Dow JonesIt fell 230 points.
On the political and economic front, U.S. President Joe Biden and representatives of congressional Republicans concluded another round of debt ceiling talks on Tuesday without any progress.
U.S. Treasury Secretary Yellen warned that the debt ceiling “limits” the federal government’s ability to pay, and the federal government will no longer have enough money to pay all bills as soon as June 1, which will lead to a default. would hit the U.S. economy and drive up borrowing costs.
Republicans questioned on Tuesday whether the U.S. debt default date is as close as Yellen said, which weakened the urgency to raise the debt ceiling and pushed U.S. stocks down.
Although both Biden and House Speaker McCarthy expressed optimism regarding reaching a deal. McCarthy told House Republicans on Tuesday that debt-limit talks were some way off, imploring them to remain united on Republican demands for spending cuts to avoid a U.S. default, signaling urgency and uncertainty in the negotiations.
Wells Fargo believes that the risk of U.S. debt default is low because both parties have strong incentives to raise the debt ceiling, but continued debate may increase volatility in fixed income and stocks.
A day earlier, James Bullard, the “Eagle King” of the Federal Reserve and the president of the St. Louis Federal Reserve Bank, predicted two more interest rate hikes this year. Despite Bullard’s hawkish sentiment, regarding 88% of traders still believe the Fed will pause interest rate hikes in June.
After China sanctioned Micron, Mike Gallagher, chairman of the US-China Strategic Competition Select Committee of the Republican House of Representatives, called on Tuesday (23rd) that the US Department of Commerce should immediately add Chinese DRAM leader Changxin Memory (CXMT) to the Entity list (i.e. trade blacklist), and ensure that American technology will not be affected in any way.
The performance of the four major indexes on Tuesday (23rd):
- US stocksDow Jones IndexIt fell 231.07 points, or 0.69%, to close at 33,055.51.
- NasdaqThe index fell 160.53 points, or 1.26 percent, to close at 12,560.25.
- S&P 500 IndexIt fell 47.05 points, or 1.12%, to close at 4,145.58.
- Philadelphia SemiconductorThe index fell 37.59 points, or 1.17%, to close at 3,177.44.
Focus stocks
The five kings of science and technology generally declined. Amazon (AMZN-US) down 0.02%; Meta (META-US) down 0.64%; Apple (AAPL-US) down 1.52%; Alphabet (GOOGL-US) down 1.99%; Microsoft (MSFT-US) fell 1.84%.
Dow JonesConstituent stocks received more black. Chevron (CVX-US) rose 2.89%; Visa (V-US) fell 2.9%; Intel (INTC-US) down 2.54%; Disney (DIS-US) fell 2.18%; American Express (AXP-US) fell 1.9%.
fee halfMore than half of constituent stocks were lower. AMD (AMD-US) rose 0.11%; Huida (NVDA-US) down 1.57%; Micron (MU-US) down 0.33%; Applied Materials (AMAT-US) fell 1.63%; Texas Instruments (TXN-US) down 0.66%; Qualcomm (QCOM-US) fell 1.63%.
Among Taiwanese ADRs, Chunghwa Telecom rose alone. TSMC ADR (TSM-US) down 1.40%; ASE ADR (ASX-US) fell 1.47%; UMC ADR (UMC-US) down 0.51%; Chunghwa Telecom ADR (CHT US) rose 0.52%.
Corporate News
Micron (MU-US) fell 0.33 percent to $66.01 a share. Micron executives estimated that the China ban would hit single-digit percentage points of revenue for the company.
Tesla (TSLA-US) slipped 1.64% to $185.77 per share. Tesla announced that they will sell Model 3 and Model Y models produced in China in Canada, confirming that Tesla completed the first shipment from the Shanghai factory to North America.
Virgin Orbit, the rocket launch company backed by British billionaire Richard Branson, sold its assets to Rocket Lab USA (RKLB-US), Stratolaunch and Vast’s Launcher. Rocket Lab USA plunged 8.69 percent to $4.52 a share.
It is rumored that the U.S. Department of Energy has informed the lithium battery manufacturer Microvast that it will not give the company a $200 million subsidy. Due to the close relationship between Microvast and the Chinese government, the outside world has questioned the Department’s “ability to protect the hard-earned money of American taxpayers.” micro macro (MVST-US) collapsed 36.36% to $1.40 per share.
apple (AAPL-US) announced a new multibillion-dollar deal with Broadcom to develop 5G radio frequency chips in the US. Broadcom (AVGO-US) rose 1.20% to $686.50 per share.
Netflix (NFLX-US) fell 1.93 percent to $355.99 a share. In order to save the number of subscriptions and accelerate the crackdown on “parasitic viewing”, Netflix has previously included Canada, New Zealand, Portugal and Spain into the attack area, and now it has expanded to the United Kingdom and the United States. Netflix is rolling out new pricing plans for U.S. subscribers, offering some ways to share Netflix outside the home.
key data
- The initial value of Markit manufacturing PMI in the United States in May was 48.5, expected 50, and the previous value was 50.2
- The initial value of Markit services PMI in the United States in May was 55.1, expected 52.5, and the previous value was 53.6
- U.S. May Markit composite PMI initial value reported 54.5, expected 53, previous value 53.4
- The annualized total of new home sales in the United States in April was 683,000, expected to be 665,000, and the previous value was 656,000
Wall Street Analysis
“Markets will continue to be volatile during the negotiations, but we expect the U.S. government to avoid a moratorium on defaults like it did in 2018 until a broader agreement is reached,” said Massimiliano Maxia, senior fixed income strategist at Allianz Global Investors.
Phillip Colmar, partner and global strategist at MRB Partners, said: “Certainly, the debt ceiling has been putting pressure on investors. A deal may be reached at the last minute, but if a deal can be reached sooner, I think that would be encouraging. “
Fabiana Fedeli, chief equity and multi-asset investment officer at M&G Plc, believes: “The possibility of a U.S. bond default is very small because neither the Democrats nor the Republicans want a default, but we may be close to a default and a deadline. The more nervous people are, the more likely they are to move to safer havens, perhaps long-term U.S. Treasuries.”
The numbers are all updated before the deadline, please refer to the actual quotation
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