Investors are bracing for a rate decision by the Federal Reserve (Fed) later, which is widely expected to raise interest rates by 2 yards (50 basis points), the largest rate hike since May 2000. In addition, Starbucks (SUBX- US), AMD (AMD) and other companies announced bright financial reports, and US stocks were mixed on Wednesday (4th).
Before the deadline,Dow Jones Industrial Averageup nearly 90 points or nearly 0.26%,Nasdaq Composite Indexdown 0.4%,S&P 500 Indexup 0.02%,Philadelphia SemiconductorThe index rose 0.3%.
The US Federal Open Market Committee (FOMC) will announce its interest rate decision at 2:00 a.m. Taiwan time on Thursday (5th), and the market is widely expected to raise interest rates by 2 yards (50 basis points). The Fed is also expected to unveil plans to shrink its nearly $9 trillion balance sheet.
Analysts pointed out that if Fed Chairman Powell shows a hawkish stance, the dollar is expected to gain strong rebound momentum, while gold prices face the risk of a sharp drop. Standard Chartered said the Fed meeting was more likely to take a hawkish stance than a dovish one. Key risks for the hawks are an extension of rate hikes to 3 yards (75bps) at future meetings or accelerated quantitative tightening (QT).
Global bond prices are sliding on the back of a new wave of monetary tightening, with U.S. 10-year yields rising above 3%, Germany’s 10-year Treasury yieldAt 1%, the UK is close to 2%.As the Bank of England considers raising interest rates to levels not seen since the global financial crisis, the safestGBPCorporate bond yields have risen above the peak of the outbreak.
JPMorgan Chase & Co. Chief Executive Jamie Dimon said in an interview on Wednesday that the Fed should have raised interest rates sooner as inflation hit the global economy, adding that the possibility of a soft landing for the U.S. economy due to Fed tightening 33%, and a 30% chance of a mild recession.
In terms of economic data, ADP released the latest US small non-farm payroll report. The US private sector added only 247,000 new jobs in April, far below market expectations of 395,000 and a sharp decline from the upwardly revised 479,000 in March.
In terms of international oil prices, with the EU’s announcement of a new round of sanctions against Russia, the oil embargo will be gradually implemented, and the US West Texas crude oil futures andBrent CrudeFutures both rose more than 4%.
As of 21:00 on Wednesday (4th) Taipei time:
Stocks in focus:
Uber(UBER-US) fell 8.92% to $26.86 a share in early trade
Uber announced its earnings for the first quarter of fiscal 2022 before the U.S. stock market opened on Wednesday. Revenue surged 136% to $6.85 billion, much higher than market expectations of $6.13 billion. Adjusted EBITDA was reported at $168 million, an increase of $527 million from the same period last year. , the total order volume increased by 35% to 26.4 billion US dollars, higher than previously expected, but a net loss of 5.9 billion US dollars, adjusted loss per share of 3.04 US dollars, the stock price fell more than 9% before the market.
However, the company is optimistic that operations are recovering from the lows of the new crown epidemic, and it does not need to make large investments to retain drivers. It estimates gross bookings in the second quarter to be between $28.5 billion and $29.5 billion, and adjusted EBITDA of between $28.5 billion and $29.5 billion. between $240 million and $270 million, and said it would generate “meaningful positive cash flow” this year.
Modena (MRNA-US) fell 0.23% to $146.21 a share in early trade
Moderna’s first-quarter profit was reported at $3.66 billion, a three-fold increase from $1.2 billion in the same period last year, thanks to its impressive vaccine sales last quarter. Last quarter’s revenue was reported at $6.07 billion, and adjusted earnings per share were reported at $8.58, both well above market expectations of $4.62 billion and $5.21.
Super Micro (AMD-US) rose 4.38% to $95.12 a share in early trade
AMD’s first-quarter earnings report, revenue increased by more than 70% year-on-year and exceeded the $5 billion mark for the first time, and due to optimistic data center demand to drive performance growth, the full-year outlook was raised. Due to Q2 and full-year revenue The forecasts were both better than expected, encouraging stock prices to rise in early trading. Supermicro’s first-quarter revenue rose 71% year-on-year to $5.89 billion, while adjusted earnings per share rose 117% to $1.13, both beating consensus estimates of $5.52 billion and $0.91.
Supermicro estimated second-quarter revenue of about $6.5 billion, higher than market expectations of $6.38 billion, and full-year revenue increased by about 60% to $26.3 billion, not only better than the previous estimate of $21.5 billion, but also better than the previous forecast of $21.5 billion. The market expected $25.145 billion.
Today’s key economic data:
- U.S. ADP added 247,000 jobs in April, expected 395,000, and the previous value of 479,000
- US March trade balance reported – $109.8 billion, expected – $107 billion, previous value – $89.8 billion
- U.S. April Markit Composite PMI final value was 56.0, expected 55.1, the previous value was 57.7
- U.S. April Markit services PMI final value at 55.6, expected 54.7, the previous value of 58.0
- US April ISM non-manufacturing index reported 57.1, expected 58.5, the previous value of 58.3
Wall Street Analysis:
Katie Koch, chief investment officer for open market equities at Goldman Sachs, said that despite the sell-off, risk assets are still struggling as valuations remain high, and some see stagflation as a real risk.
Blerina Uruci, an economist at T. Rowe Price, said that while the Fed remains focused on quelling inflation, any further hawkish stance could be moderated to some extent in order to achieve a soft landing.