As bond yields continued to rise and investors waited for corporate earnings reports, U.S. stocks were weak in early trading on Friday (22nd).Dow Jones Industrial Averagedown 0.54%,S&P 500 Indexdown 0.31%,NasdaqThe index edged up 0.02%,half feeIt fell 0.2%.
U.S. stocks turned from gains to losses on Thursday. An important turning point was the hawkish stance of Federal Reserve Chairman Powell, indicating that the central bank would be more active in fighting inflation and discussing whether to raise interest rates by 2 yards. The anxiety was also brought to Friday.
Traders now see an 88.2% chance of a 50-basis-point rate hike at the Fed’s May meeting and an 11.8% chance of a 75-basis-point hike.
The U.S. Treasury yield curve inverted, with the 5-year bond yield up 3.4 basis points to 3.013%, higher than the 30-year U.S. bond yield, which rose 1.8 basis points to 2.951%.
The US stock market earnings season continues, and the performance of the companies that have been announced so far is generally better than expected.S&P 500 IndexOf the 91 companies that have reported earnings, more than 80% have beaten earnings estimates and 65% have beaten sales.
As of Friday 21:00 Taipei time:
- Dow JonesDown 6 points and 0.54%, temporarily reported 34605.19 points
- NasdaqUp 2 points or 0.02%, temporarily reported 13177.12 points
- S&P 500 fell 13.5 points, or 0.31%, to 4380.11
- half feeDown 6 points or 0.2%, temporarily reported 3052.73 points
- TSMC ADR fell 0.52% to $97.15 per share
- 10-year U.S. Treasury yieldunchanged at 2.91%
- NY Light crude fell 0.79% to $102.97 a barrel
- Brent CrudeDown 0.78% to $107.48 a barrel
- goldDown 0.6% to $1,936.40 an ounce
- US dollar indexUp 0.32% to 100.93
Stocks in focus:
SNAP (SNAP-US) rose 4.6 percent to $30.78
Snap reported first-quarter profit and revenue following the bell on Thursday that missed Wall Street’s expectations and disappointing second-quarter revenue growth forecasts, but its 18% annual increase in daily users beat expectations.
Snap CEO Evan Spiegel noted that the first quarter of 2022 was more challenging than expected. Spiegel blamed macroeconomic conditions for the problems in the first quarter, including a suspension of by advertisers following Russia invaded Ukraine in February.
American Express (AXP-US) fell 2.2 percent to $181.64
American Express Co reported first-quarter profit on Friday that topped Wall Street expectations, helped by strong spending by its cardholders around the world, as consumer demand for travel and entertainment returned to pre-pandemic levels.
American Express said foreign-exchange-adjusted travel and entertainment spending rose 121% from a year earlier and reached pre-global levels for the first time in March.
Gap Inc.(GPS-US) fell 20.2 percent to $11.40
GAP announced on Thursday that Nancy Green, CEO of sub-brand Old Navy, will leave this weekend and expects first-quarter sales to decline more than initially expected.
Gap expects net revenue to fall 10-15% in the first quarter of fiscal 2022 compared with the same period a year earlier, following expecting a mid- to high-single-digit decline in revenue for the quarter.
Daily key economic data:
- US April Markit manufacturing PMI initial value, expected 58, the previous value of 58.8
Wall Street Analysis:
Anastasia Amoroso, chief investment strategist at iCapital Securities LLC, said that U.S. stocks are now being pulled by two forces. The first is that corporate earnings are actually pretty good, but the increasing number of hawkish comments from U.S. Federal Reserve officials are pulling down. Rising momentum.
Goldman Sachs analyst Chris Hussey pointed out that with the labor market tightening and business sentiment weakening,10-Year U.S. Treasury YieldRising, which resurfaced fears of stagnant inflation. In this context, investors are evaluating the financial performance of companies.
Ian Lyngen, head of rates strategy at BMO Capital Markets, believes that it remains unknown whether Powell will be able to implement the necessary strategies without derailing the economic recovery and raise rates no less than is needed to contain inflation.
