U.S. stocks opened higher on Wednesday (21st) as the market waited for the Federal Reserve (Fed) to announce the latest interest rate decision and a dot-plot chart. Through the chart, we could see the Fed policymakers’ expectations for the duration of future monetary tightening and the rate of interest rate hikes.
Before the deadline,Dow Jones Industrial Averagerose more than 200 points or 0.73%,Nasdaq Composite Indexrose more than 50 points or 0.48%,S&P 500 Indexrose nearly 0.7%,Philadelphia SemiconductorThe index rose more than 1 percent.
The Fed will announce its interest rate decision at 2:00 a.m. Taiwan time on Thursday (22nd). The market generally expects to raise interest rates by another 3 yards (75 basis points), but does not rule out a rate hike of 4 yards (100 basis points).
In addition to the interest rate decision, the Fed’s dot plot has also attracted market attention. The dot plot reflects the Fed policymakers’ expectations for the future path of interest rate hikes, and when or to what extent they will raise interest rates. Fed Chairman Powell will also hold a press conference after the latest interest rate decision is announced, and his remarks at that time may also have a major impact on the market.
Some market analysts pointed out that historical experience shows that after the Fed announces its interest rate decision, there may be a wave of relief and rebound in U.S. stocks. In the past 6 days,S&P 500 IndexandNasdaq The 100 fell 6.2% and 7%, respectively.
In terms of geopolitics, Russian President Vladimir Putin made a statement earlier this morning, announcing the mobilization of reservists. At the same time, the Russian Defense Minister said that Russia will recruit 300,000 reservists in the process of implementing a partial mobilization order.
Putin said the main goal of the special military operation remained “the liberation of the whole of Donbas”. He also accused the West of having “crossed all boundaries”, warning those carrying out “nuclear blackmail” against Russia that “the wind may turn in their direction”, adding that “if the territorial integrity of Russia is threatened, we will use all the means. This is not bluff.”
Dollar strengthens on Putin’s remarks, whileEURWeak, before the deadlineUS dollar indexrose to 110.42; at the same time, international oil prices rose, West Texas crude oil futures expiring in November rose 2.28% to $92.69 a barrel, and West Texas crude oil futures expiring in November rose 2.14% to $85.77 a barrel.U.S. 10-year Treasury yieldIt fell 4 basis points to 3.53%.
In other news, the German government announced the nationalization of Uniper, the country’s largest natural gas supplier, to avoid an energy crisis.
As of 21:00 on Wednesday (21st) Taipei time:
Stocks in focus:
General Mills (GIS-US) rose 3.63% to $78.15 a share in early trade
Cheerios cereal maker General Mills raised its full-year sales and profit forecasts on Wednesday, citing higher prices and strong demand for its breakfast cereal, snacks and pet food. The company forecasts organic growth of between 6% and 7% for fiscal 2023, compared with a previous estimate of 4% to 5%.
Stitch Fix(SFIX-US) fell 5.31% to $4.47 a share in early trade
Shares of online shopping and styling services company Stitch Fix fell more than 10 percent in premarket trading after previously reported weaker-than-expected fourth-quarter results and a cut in its first-quarter forecast. The company lost $0.89 per share in the fourth quarter, missing analysts’ estimates of a loss of $0.63 per share; revenue of $481.9 million was in line with expectations of $487.4 million.
Canaccord Genuity downgraded the stock to “Hold” from “Buy,” citing a tough macroeconomic environment that complicates the company’s efforts to turn around operations.
Beyond Meat (BYND-US) rose 0.53% to $16.11 a share in early trade
Beyond Meat’s chief operating officer Doug Ramsey was suspended yesterday (20th) because he was arrested on Saturday (17th) for allegedly biting his opponent’s nose during an argument. Beyond Meat said its chief operating officer will be replaced on an interim basis by Jonathan Nelson, senior vice president of manufacturing operations. After the news came out, Beyond Meat’s stock price fell 6% on the day. It continued to decline before Wednesday’s pre-market, but then rose 1.37% to temporarily report $16.25 per share.
Today’s key economic data:
- The annualized total of existing home sales in the United States in August is expected to be 4.7 million units, compared with the previous value of 4.81 million units
- US August existing home sales annualized monthly rate expected – 2.3%, the previous value – 5.9%
- US last week (as of 9/16) EIA crude oil inventory changes are expected to 2.161 million barrels, the previous value of 2.442 million barrels
- US last week (as of 9/16) EIA gasoline inventory change is expected – 431,000 barrels, the previous value – 1.767 million barrels
Wall Street Analysis:
Danni Hewson, a financial analyst at AJ Bell, said investors were predicting too much about the Fed’s next move, and the Fed’s decision should bring them some comfort. If the Fed raises rates by another 3 yards, as originally planned, the market could bounce back, in part by removing investor concerns about a 4-yard rate hike.
Victoria Scholar, head of investment at Interactive Investor, said traders who held short positions in anticipation of the Fed’s announcement tonight are closing their positions today to avoid any event risk.
Ales Koutny, portfolio manager at Janus Henderson Investors, said the escalation of the Russian-Ukrainian conflict will affect global markets, deepening the energy and food crises, while also weighing on risk assets, but the dollar will continue to benefit because the United States is geographically independent. And because of its economic makeup, the U.S. is more resilient.