After the Christmas holiday, major U.S. stock indexes opened lower on Tuesday (27th), and rising U.S. Treasury yields dragged down market sentiment boosted by China’s cancellation of the new crown pneumonia quarantine policy.In addition, due to the news that Tesla, the leader of electric vehicles in the United States, will reduce its production next year, its stock price fell more than 6% in early trading, dragging down the market.NasdaqIndexes were lower.
before the deadline,Dow Jones Industrial Averagefell more than 70 points or nearly 0.2%,Nasdaq Composite Indexfell nearly 140 points or nearly 1.3%,S&P 500 Indexfell nearly 0.6%,Philadelphia SemiconductorThe index fell nearly 2%.
China lifted the new crown epidemic isolation measures and the United States announced last week that the key inflation index had cooled.dollar indexGo Yang.
China announced yesterday that starting from January 8, 2023, it will implement “Class B and B management” for new coronavirus infections, and will no longer implement isolation measures for infected persons, no longer identify close contacts, and no longer delineate high and low risk areas.
In addition, the United States announced last Friday that the growth rate of personal consumption expenditures (PCE) has slowed down, highlighting signs of cooling US inflation. The interest rate has been raised by 2 yards (50 basis points) earlier this month, and the current basic interest rate level is in the range of 4.25% to 4.5%.
This week is the last week of this year. On the one hand, investors are looking forward to the Christmas market, and on the other hand, they are worried regarding the economic outlook for next year.
On the energy front, international oil prices traded higher on Tuesday as economies reopened, the outlook for Chinese demand and cold weather across the United States that shut refineries.Before the deadline, due in February next yearBrent Crude OilFutures and West Texas Intermediate crude, which expires in February, both rose more than 0.3%.
In other news, MasterCard recently released a report showing that U.S. retail sales grew by 7.6% from November 1 to December 24, which was higher than the 7.1% growth that MasterCard predicted in September. However, due to decades of high inflation Growth in holiday retail sales this year was slower than last year’s 8.5% as consumers became more cautious, as the threat of rising interest rates and a recession in interest rates made consumers more cautious.
As of 22:00 on Tuesday (27th) Taipei time:
Focus stocks:
Tesla (TSLA-US) fell 6.25% in early trade to $115.75 per share
Tesla’s U.S. stock fell more than 5% before the market. It has fallen for 6 consecutive trading days. The stock price has fallen in 9 of the past 10 trading days. So far this year, Tesla’s stock price has fallen by regarding 65%. Biggest annual drop ever. According to media reports before the market, Tesla’s Shanghai factory will reduce production by the end of January next year following the suspension of production in the last week of December.
Paratron (PTON-US) fell 3.77 percent in early trade to $8.55 a share
Fitness equipment retailer Peloton is selling refurbished flywheels for discounts of up to $500 compared to brand new. The plan is Paratron’s latest effort to boost demand following expanding its leases earlier this year. Shares of Palette rose slightly by 1% before the market.
NIO (NIO-US) fell 4.24 percent in early trade to $10.51 a share
Shares in Chinese electric car maker Nio slumped more than 6 percent in premarket trading following the company slashed its forecast for fourth-quarter deliveries, citing the coronavirus outbreak in major Chinese cities limiting its supply chain and weak demand.
Today’s key economic data:
- The initial monthly rate of U.S. wholesale inventories in November was reported at 1%, expected 0.4%, and the previous value of 0.6%
- The monthly rate of the U.S. house price index in October was reported at 0%, expected – 0.6%, and the previous value was 0.1%
- U.S. December Dallas Fed manufacturing index reported -18.8, expected -16, previous value -14.4
Wall Street Analysis:
Kunal Sawhney, chief executive of Kalkine Group, said a big step forward in China’s reopening was desperately needed by the global economy, although in the short term or until the middle of next year, it might be a bit of a stretch to get too hopeful regarding stocks.
AvaTrade market analyst Naeem Aslam said the biggest concern for many traders and investors is how high the Fed will raise interest rates and how badly this will affect the US economy. From the tone of Fed officials, it can be clearly seen that officials are not afraid to continue raising interest rates, economic recession is not their biggest concern, and they will do whatever it takes to reduce inflation.
XM investment analyst Raffi Boyadjian said that the possibility of recession in Europe and the United States is very high, and investors are worried regarding the Fed’s excessive tightening. China has imposed strict blockade once more in recent weeks, adding to the gloomy outlook. It may take weeks before Chinese consumers start spending once more due to the current high infection rate, and supply chain disruptions will take time to ease, but this latest development removes uncertainty that the zero-clearing policy may return, boosting Market sentiment towards risky assets.
