As the Federal Reserve (Fed) becomes more hawkish, the conflict between Russia and Ukraine intensifies, and the epidemic in China continues to spread, the market starts a new week with a cautious tone, and US bond yields continue to rise. US stocks opened on Monday (11th). Go low. Before the deadline,Dow Jones Industrial Averagefell more than 100 points or nearly 0.4%,Nasdaq Composite Indexdown 1.45%,S&P 500 Indexdown 0.9%,Philadelphia SemiconductorThe index fell 1.76%.
The Fed’s hawkish stance, the turmoil in commodities markets caused by Russia’s invasion of Ukraine, and the prospect of an economic slowdown continue to weigh on market sentiment, and China’s lockdown measures against the virus could exacerbate supply chain disruptions, which in turn threatens to push inflation higher.
U.S. Treasury yields have been climbing recently, with 10-year bond yields rising above 2.76% at one point on Monday before falling slightly to 2.75% by the time of writing, as investors worry that rising inflation and the Fed’s aggressive monetary policy plan may slow economic growth. The 5-year and 30-year Treasury bond rates remained inverted.
Investors are waiting for the company’s upcoming earnings report this week to restore confidence in the stock market outlook. This week, Fed officials will make speeches one after another. Among them, the consumer price index will be announced on Tuesday (12th) and Wednesday (13th). (CPI), producer price index (PPI) two inflation-related data is the most important.
Loretta Mester, president of the Cleveland Fed branch, said recently that she is confident the U.S. will avoid a recession as the Fed tightens policy, although inflation above 2 percent could continue into next year.
Regarding the Russian-Ukrainian war, although Western countries have stepped up sanctions against Russia, the war between the two countries has not stopped. According to foreign media reports, Ukrainian President Volodymyr Zelensky delivered a speech to the South Korea Association via video today, saying that Russia has “completely destroyed”. “The besieged city of Malibo, where tens of thousands of people may have been killed, has requested military aid from South Korean lawmakers.
In China, due to the continuous spread of the epidemic in Shanghai, although it has entered “global static management” for 10 days, there is no sign of relief. Production and consumption have had a negative impact. In addition, international oil prices have also fallen due to the impact of the epidemic in China. West Texas crude oil futures andBrent CrudeFutures fell nearly 4%, both falling below the $100 mark.
The economic growth target set by the Chinese government for 2022 is about 5.5%. At present, some economists predict that China’s economic growth rate will be much lower than this, saying that in order to make up for the economic losses caused by the lockdown, China will have to increase state-led growth. Spending on infrastructure and other big projects has continued to climb already high debt levels.
As of 21:00 on Monday (11th) Taipei time:
Stocks in focus:
Twitter (TWTR-US) fell 1.17% to $45.69 a share in early trade
Musk recently became Twitter’s largest individual shareholder with a 9.2% stake, and at the same time became a director of the board of directors. However, today’s latest report said that Musk decided not to join Twitter’s board of directors. Twitter CEO Parag Agrawal tweeted that Musk’s board appointment was scheduled to take effect on April 9, but Musk said that morning that he would not join the board. In this regard, the Twitter CEO and Musk did not explain why.
NIO (NIO-US) fell 8.36% to $18.33 a share in early trade
Due to the closure of Shanghai and the shortage of raw materials, Chinese electric vehicle manufacturer NIO recently announced the shutdown of its factory, and then announced the increase of various models and battery plans.According to the announcement, in terms of vehicle prices, the starting prices of ES8, ES6, and EC6 models have increased.RMB 10,000 yuan; the starting prices of the latest two ET7 and ET5 remain unchanged.
In terms of BaaS battery rental prices, the battery rental service fee for long-life battery packs is increased by monthlyRMB 1,480 yuan increased by 200 yuan to 1,680 yuan, the standard battery pack battery rental service fee remains unchanged, and users who have purchased a car are not affected by the adjustment.
Teru (NVDA-US) fell 4.81% to $220.06 a share in early trade
U.S. graphics chip maker Nvidia said it was seeking shareholder approval to increase its number of common shares from 4 billion to 8 billion. The move will give Huida greater flexibility in taking steps such as stock splits and dividends without the need for further shareholder votes.
Today’s key economic data:
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Wall Street Analysis:
Jeffrey Halley, senior market analyst at OANDA, said that concerns about China’s economic growth are the main reason for today’s drop in oil prices. There is no sign of lifting the lockdown in Shanghai, and Guangzhou may start large-scale nucleic acid screening. At present, the market is increasingly worried that if China’s Omicron epidemic spreads to other cities, its dynamic reset policy will lead to a large-scale and prolonged lockdown, which will have a negative impact on industrial production and consumption in the country.
Yardeni, president of Yardeni Research, said the mantra of many investors today is “don’t fight the Fed when it’s fighting inflation,” agreeing but not as pessimistic as it sounds, adding that it’s partly due to the accumulation of excess liquidity A boost to corporate earnings from sex and inflation is support for stocks.
U.S. 10-year, 5-year and 2-year yields hit more than three-year highs last week after a surprise turn of hawks from several typically seen as dovish Fed officials, said Michael Hewson, an analyst at CMC Markets.