Although the Federal Reserve (Fed) raised interest rates by 0.5 percentage points to curb runaway inflation, the market’s concerns regarding inflation resurfaced. U.S. stocks opened lower on Thursday (5th), retreating from the previous day following the Fed announced a rate hike. Part of the rally.
Before the deadline,Dow Jones Industrial Averagefell more than 400 points or nearly 1.21%,Nasdaq Composite Indexfell more than 2%,S&P 500 Indexfell nearly 1.5%,Philadelphia SemiconductorThe index was more than 2.5%.
The Federal Open Market Committee (FOMC) announced a 2-yard rate hike as expected, raising interest rates to a range of 0.75%-1%, and will begin to shrink its balance sheet in June in an attempt to curb the hottest inflation since the early 1980s, Chairman Powell said. Published remarks with a dove in the eagle, emphasizing the Fed’s determination to reduce inflation, and quell market concerns regarding a 3-yard rate hike.
At the same time, following the pace of global central banks to raise interest rates, the Bank of England (BOE) raised interest rates by 1 yard (25 basis points) on Thursday, raising the benchmark interest rate from 0.75% to 1%, the highest level since 2009. This is the fourth time the Bank of England has raised interest rates in response to inflation currently above 10%, although the bank also warned that the British economy may slip into recession.
The Bank of England maintained its growth forecast for this year at 3.75%, but lowered its forecast for 2023 to a contraction of 0.25% from a previous forecast of 1.25% growth, and lowered its growth forecast for 2024 to 0.25% from a previous forecast of 1.0% .
In terms of economic data, the U.S. Department of Labor announced the latest unemployment benefits data. Last week, the number of people receiving unemployment benefits reported 200,000, an increase of 19,000 from the previously revised 181,000, higher than market expectations of 182,000, and a record high of 182,000 last year. The biggest weekly gain since July and the highest since mid-February this year, nonetheless, is consistent with a tightening labor market and further wage gains.
On the same day, U.S. labor productivity fell at the fastest pace in nearly 75 years in the first quarter, mainly due to a surge in new crown cases and soaring labor costs. Rising coronavirus cases, runaway inflation and Russia’s invasion of Ukraine have all dented economic activity, but most economists still expect growth to return later this year.
In terms of international oil prices, the ministerial meeting of OPEC and its partner countries (OPEC+) decided to increase production by 432,000 barrels per day in June, ignoring the fact that the European Union is considering banning the import of Russian crude oil, which may lead to a shortage of international oil supply.Brent CrudeFutures rose 2.89% to $113.32 a barrel, while West Texas Intermediate crude futures rose 2.63% to $110.65 a barrel.
In terms of individual stocks, the U.S. Securities and Exchange Commission (SEC) recently added 88 Chinese concept stocks to the “expected delisting” list, raising the number of Chinese concept stocks on the list to 105. Among the newly added companies are Huaneng International, Aluminum Corporation of China, Bilibili, Pinduoduo, 36Kr, Tencent Music, Ctrip, Xiaopeng Motors, JD.com, China Mobile, NetEase, NIO, PetroChina, Kexing Bio and other well-known companies in various industries.
As of 21:00 on Thursday (5th) Taipei time:
Stocks in focus:
Twitter (TWTR-US) rose 3.77% to $50.91 a share in early trade
According to U.S. Securities and Exchange Commission (SEC) filings, Musk has withdrawn from companies including Oracle (ORCL-US) co-founder Larry Ellison (Larry Ellison) and Sequoia Capital (Sequoia Capital) received $ 7.14 billion in funding to fund his $ 44 billion acquisition of Twitter.
In addition, Saudi Arabian investor Prince Alwaleed bin Talal, who initially opposed the takeover, also agreed to put his $1.89 billion Twitter stake in the deal instead of cashing it out.
Shopify(SHOP-US) fell 15.68% to $521.33 per share in early trade
Canadian e-commerce Shopify U.S. stock market announced its first-quarter earnings report for fiscal year 2022 before the opening bell, with revenue increasing 22% annually to $1.2 billion, slightly lower than market estimates of $1.24 billion, and adjusted earnings per share of only $0.2, far lower The market expected $0.64. In addition, Shopify also gave cautious financial forecasts, because performance growth during the epidemic period has slowed in the absence of new consumption stimulus funds.
Shopify also announced on the same day that it would acquire U.S. logistics company Deliverr in a cash and stock deal valued at $2.1 billion to ease supply chain chaos.
Etsy(ETSY-US) plunged 16.83% to $90.93 a share in early trade
Although the e-commerce platform Etsy reported first-quarter earnings of $0.60 per share, in line with market expectations, and revenue of $579 million, beating market expectations of $575 million, Etsy’s second-quarter revenue fell due to a decline in consumers’ disposable income. Revenue was estimated at between $540 million and $590 million, below consensus estimates of $628 million, while second-quarter gross merchandise sales were estimated at $2.9 billion to $3.2 billion, also below consensus estimates of $3.4 billion.
Today’s key economic data:
- Last week (as of 4/30) the number of people receiving unemployment benefits in the United States reported 200,000, 182,000 were expected, and the previous value was 181,000
- Last week (as of April 23), the number of people receiving unemployment benefits in the United States reported 1.384 million, 1.4 million is expected, and the previous value was 1.403 million
Wall Street Analysis:
Fraser Lundie, co-head of credit at Hermes Investment Management, said the combination of high inflation and a weakening global economic outlook has raised concerns among investors regarding how far central banks can raise interest rates without overburdening the economy.
Seema Shah, strategist at Principal Global Investors, said the market had a relief rally yesterday, but the challenges facing equities will start to emerge on Thursday, and while inflation has peaked or is likely to peak, other macroeconomic factors will give investors and interest rates a boost. Considering all the external factors, including the Russian-Ukrainian war, China’s epidemic blockade, supply chain and other issues that have pushed commodity prices to high levels, there is still a lot of uncertainty in the future.
Viraj Patel, global macro strategist at Vanda Research, said it’s difficult to tell who will be the big buyers of the stock market in the coming weeks, it’s a game waiting for a catalyst to emerge, and more confidence needs to be gained from economic data, if not showing inflation The peak is that the economy is slowing and the Fed does not need to take such drastic measures.
