Investors are waiting for the US Federal Reserve (Fed) to announce its December interest rate decision later, and to observe whether the recent data showing cooling inflation is enough for the Fed to turn dovish. Major US stock indexes rose slightly after opening flat on Wednesday (14th).
before the deadline,Dow Jones Industrial Averageup nearly 100 points or 0.3%,NasdaqThe composite index rose nearly 0.2%,S&P 500 Indexup nearly 0.3%,Philadelphia SemiconductorThe index rose nearly 0.3 percent.
Although the U.S. consumer price index (CPI) report in November showed that inflation continued to cool down, leading to a comprehensive rebound in U.S. stocks and bond markets, the market warned that the Fed may continue to raise interest rates, which moderated the gains.
After the news that the Fed may announce a 2 yard (50 basis point) increase in interest rates later has been fully priced in by the market, traders are still uneasy about when policy makers will signal a pause in rate hikes and whether they may cut interest rates next year.
Traders are currently betting that after raising interest rates by 2 yards this week, the Fed may raise interest rates by 2 yards again at its meeting in late January next year, and then cut interest rates of the same scale by the end of next year.
The Fed will announce its December interest rate decision at 3 a.m. Taiwan time on Thursday (15th), along with the latest quarterly economic monthly summary (SEP) and interest rate forecast dot plot. A press conference will be held half an hour later. Investors need to pay attention to the Fed’s attitude towards next year’s monetary policy path, especially whether it will affect the market’s expectations for a rate cut in the second half of next year.
In other news, the National Bureau of Statistics of the United Kingdom released data on Wednesday showing that British inflation fell from a 41-year high. In November, the CPI increased by 10.7%, slightly lower than market expectations and rose by 10.9%. Last month, it rose by 11.1%. It was expected to rise by 0.4%, and it was expected to increase by 0.6%, easing the pressure on the Bank of England to continue raising interest rates in the context of economic recession.
In addition, some media reports pointed out that the European Central Bank (ECB) predicts that the inflation rate will remain above the 2% target in the next three years, which is higher than the market’s current expectations, which indicates that the ECB’s war against high prices is far from over. It is reported that the European Central Bank on Thursday (15th) will inevitably raise interest rates for the fourth time in a row to curb inflation. At the same time, it will also announce a new quarterly economic forecast, and will also draft a quantitative tightening (QT) plan.
In terms of energy, the International Energy Agency (IEA) on Wednesday raised its forecast for global crude oil demand for this year and next two years, because the unexpected economic resilience of major Asian economies boosted oil demand, and Russian oil affected supply under sanctions, the IEA forecast Oil prices may rebound next year. Before the deadline, international oil prices both rose by nearly 2%.
As of 22:00 on Wednesday (14th) Taipei time:
Focus stocks:
Tesla (TSLA-US) was down 0.64% in early trade to $159.92 per share
Wall Street investment bank Goldman Sachs cut Tesla’s target price from $305 to $235 per share due to weak demand. Tesla shares have fallen about 40% since the end of September, and their market value fell below $500 billion at one point yesterday.
Best Buy (BBY-US) fell 2.39 percent in early trade to $82.06 a share
Shares of electronics retailer Best Buy fell 3% in premarket trading after BofA downgraded the stock to underperform from neutral, citing gains. The environment in which Lee grows is full of challenges.
Amazon (AMZN-US) rose 0.7 percent to $93.14 a share in early trade
Amazon (AMZN-US) is facing a $280 million lawsuit from Gilimex, a Vietnamese storage systems manufacturer. The latter accused Amazon of suddenly reducing orders after growth in online spending slowed this year, putting pressure on manufacturers to overcapacity and raw materials.
Today’s key economic data:
- The monthly rate of the U.S. import price index in November was -0.6%, expected -0.5%, and the previous value was -0.4%
- The monthly rate of the US export price index in November was -0.3%, expected -0.4%, and the previous value was -0.4%
Wall Street Analysis:
Michael Wilson, chief strategist at JPMorgan Chase & Co., warned clients to be more mindful of earnings risks because expectations are “too high,” while reiterating that next year’s earnings will be well below consensus expectations. He believes that the market is now pricing in a disconnect with the earnings recession she expects, and there are some “similarities” to the 2008 U.S. stock market crash.
Citigroup’s US stock strategist Scott Chronert’s recent research report will be released by the end of next year.S&P 500 IndexThe target of the index was raised from 3,900 to 4,000, which means that compared with the current level, the performance of US stocks may be lackluster during the period.He also said, yesS&P 500 IndexHowever, it is too early to declare an all-clear, and the earnings reset, economic deceleration and continued hawkish comments from the Fed could trigger another pullback in stocks and eventuallyS&P 500 Indexwill weaken.