Black Friday! Following the US Federal Reserve’s “Eagle King” St. Louis Fed President Bullard’s proposal to raise interest rates by 0.75%, Chairman Powell announced that he may continue to curb inflation with a similar increase after raising interest rates by 0.5% in May. The most eagle statement! As soon as Mr. Bao’s words fell, Nomura immediately issued an astonishing prediction that it is expected that interest rates will be raised by another 0.75% in June and July. The sharp interest rate hike caused panic. Last Friday, the US 10-year bond interest rate approached 3% again, the US dollar index exceeded 101 again, the US stock Dow fell nearly 1,000 points or 2.82%, the SSI and the Nasdaq fell 2.77% and 2.55% respectively. .
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The latest interest rate futures show that the market is betting on a total of 2% interest rate hikes in the first four discussions at the end of September, with a 99.8% probability of a 0.5% rate hike in May, an 87% probability of a 0.75% rate hike in June, and a 83.1% probability of a 0.5% rate hike in July. , The probability of raising interest rates by 0.25% in September is 93%, reflecting that the market’s latest expected rate hike path is more inclined than originally expected, and the pace of interest rate hikes is the most urgent since 1982. The US 5-year and 7-year bond yields once rose above 3%, and the 10-year and 30-year bond yields were inverted. The 10-year bond yield rose to 2.974% and then turned back to 2.905%. Coupled with the sharp rise in the dollar, it reflected that funds poured into the United States and into the bond market, and bond prices rose and bond yields returned.
China outbreak boosts dollar risk premium
U.S. interest rates rise, the dollar strengthens, and the Chinese epidemic suppresses risk appetite to a certain extent, increasing the risk premium of the dollar, and indirectly pushing up the dollar. Last week, the euro fell to 1.0761 against the US dollar, the lowest level in the past two years; the pound against the US dollar fell to 1.2822, the lowest level in the past two years; the Japanese yen fell to 129.4 yen per US dollar, the lowest in nearly 20 years; the RMB also fell below 1 US dollar against 6.5 At the Yuan mark, the CIF price was as low as 6.5067, and the FOB price was as low as 6.5482, both the lows in the past 8 months. Although the Hong Kong dollar has fallen, due to its peg to the U.S. dollar, the British pound is at a low of ten, and the Japanese yen is at a low of six. For Hong Kong people who love to travel, it can be said that the bitterness is a little sweet in the three-way exchange of stocks and bonds.
Back to the stock market, the most mouth-watering stock last week was Netflix (NFLX)! Netflix sent its first-quarter results, with a 10% increase in revenue, but the loss of 200,000 subscribers. The company explained that it had withdrawn from Russia and lost 700,000 customers, otherwise it should have added 500,000 customers, but it was still much worse than the market’s expected increase of 2.5 million customers. What’s more, the company warned that it would lose another 2 million customers this quarter, dragging down the stock price overnight. %. This year, Netflix has fallen by 64%, the worst among the benchmark index stocks. Fans leave, Netflix is not only dependent on Russia, of course, it is not less dependent on competition and inflation!
Inflation bursting to the table will affect a series of industries
In terms of competition, in the past 15 years, the international video streaming platform has mainly been the battle between Netflix and Amazon Prime. In the past two or three years, Disney+, HBO Max, Apple TV+, etc. have emerged. However, according to a report by market research agency Kantar Worldpanel, video streaming platforms in the first quarter generally recorded a loss of subscribers, and the loss rate of the younger generation Disney+ was higher than that of the predecessors Netflix and Amazon Prime. The local situation is similar. According to the TVB (511) annual report, the number of paid subscribers of myTV SUPER changed from 1.3 million to “over 1 million” last year, which means a decrease of nearly 300,000.
Subscribers do not subscribe, because they want to save money! Inflation is on the rise. According to a QuickBooks consumer survey, 58% of respondents will reduce their spending as the cost of living rises. The main reason for the reduction in spending is that the increase in salaries does not outpace the increase in prices. In addition, according to the Bank of America report, the public has greatly reduced non-essential expenses, such as going out for meals, shopping for shirts, etc., and greatly increased expenses such as food, fuel, water and electricity. To save money, the most convenient way to subscribe is to subscribe to Cut. In addition to video and audio streaming, expenses such as social platforms and game platforms are also included in the Cut. The related demand will decline, and the consumption of computer mobile devices and cloud data will also decline, affecting cloud enterprises and the same semiconductor companies. On Friday, the Philadelphia Semiconductor Index fell 2.25% and broke the bottom. Semiconductor stocks and technology stocks should not be touched for the time being; on the other hand, supermarket stocks and utility stocks should be paid attention to.
citrus cutter
Previously worked as a financial reporter and editor, and wrote a financial column in a Hong Kong newspaper for more than ten years
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This column is published every Monday