Major U.S. stock indexes opened higher on Monday (9th) on optimism that China will reopen its borders, while signs of a cooling labor market strengthened bets on the Federal Reserve (Fed) slowing down the pace of interest rate hikes.
before the deadline,Dow Jones Industrial Averagerose more than 60 points or nearly 0.2%,Nasdaq Composite Indexrose more than 80 points or nearly 0.8%,S&P 500 Indexup nearly 0.3%,Philadelphia SemiconductorThe index rose nearly 1.4%.
Before the opening of the U.S. stock market, the U.S. stock futures index rose, driven by China’s reopening of the border and the Fed’s slowdown in raising interest rates.Dow Jones IndexFutures rose 0.3%,S&P 500 IndexFutures rose nearly 0.5%,Nasdaq 100 futures rose more than 0.6%.
The MSCI Emerging Markets Index was poised to enter a bull market following it surged more than 20% from its October low, largely boosted by Chinese stocks. China adjusts its COVID-19 strategy and proposes more economic support policies.
With the U.S. ISM non-manufacturing index in the shrinking range last year and wage growth slowing, traders bet the Fed will slow down the pace of interest rate hikes. 10-Year Treasury Bond Yieldrising.
The U.S. will release its consumer price index (CPI) report for December last year on Thursday (12th), and the market will focus on this heavyweight data. Last week’s latest non-agricultural employment report failed to provide a clear picture of inflation, and the unemployment rate Wages are at multi-decade lows and wage growth is slowing.
Kansas City Fed President Esther George warned on Friday that the Fed will face tougher choices if the U.S. job market starts to slow.
Karim Chedid, head of investment strategy for iShares EMEA at BlackRock, said: “I don’t think it’s time for the market to go back to the Goldilocks strategy because it’s not the same as it was in the past decade. It’s true that wages have come down, but when you look at wages When compared with the 2% inflation target, there is still a distance between the two.”
Interest rate markets show investors expect policy rates to peak below 5% this cycle, down from 5.06% ahead of Friday’s nonfarm payrolls report. While traders remain divided on the size of a rate hike in February, a one-yard (25 basis point) hike is more likely than a two-yard (50 basis point) hike.
At the same time, Morgan Stanley strategist Michael Wilson warned that the decline in U.S. stocks is far greater than many pessimists expected, and the specter of an economic recession may exacerbate the worst annual decline in U.S. stocks since the global financial crisis.
Wilson said that while investors are generally pessimistic regarding economic growth, corporate profit expectations are still too high and the equity risk premium is at its lowest since 2008, which means that if the economy has a mild recession,S&P 500 IndexThe drop from current levels might be as much as 22%.
In other news, international oil prices rose following a Chinese central bank official said China’s economic growth would soon return to normal as the government provided more financial support to households and businesses. In addition, following the latest data from the United States showed that the Fed’s hawkish stance is expected to soften this year,goldPrices continue to rise.
As of 22:00 on Monday (9th) Taipei time:
Focus stocks:
Lululemon(LULU-US) fell 10.61% in early trade to $294.33 per share
Shares of Canadian sportswear brand Lululemon fell more than 10% in premarket trading following the company lowered its gross margin forecast for the first quarter. The company raised its fourth-quarter net revenue guidance, forecasting annual growth of 25% or more.
Bed, Bath & Beyond(BBBY-US) rose 17.59 percent to $1.54 a share in early trade
Shares of the struggling home goods retailer Bed, Bath & Beyond rose more than 17% in premarket trading. The company warned last week that it may not be able to continue operating due to a lack of cash, sending shares tumbling.
Huida (NVDA-US) rose 3.41 percent to $153.66 a share in early trade
Shares of Nvidia rose nearly 2% premarket following Wells Fargo analysts named the stock a top pick for positive changes to the data center product cycle this year.
Today’s key economic data:
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Wall Street Analysis:
Citigroup Chief Executive Jane Fraser predicts that the Fed will raise interest rates to just below 5.5 percent by May and then likely keep rates there until the end of next year, with a recession likely sometime in the second half of this year. While headline U.S. inflation has peaked, service sector inflation continues to pick up, he said.
Ronald Coase, an economist at the London School of Economics, said that the Fed may raise interest rates more than the market currently expects, and the market will be impacted. “All risks are to the upside, 5.5% interest rate risk is relatively low,” he said.
