The U.S. consumer price index (CPI) data in June far exceeded expectations, exacerbating market concerns that the Federal Reserve (Fed) will raise interest rates sharply to calm soaring prices, and U.S. stocks opened lower on Wednesday (13th).
Before the deadline,Dow Jones Industrial Averagedown nearly 300 points or nearly 1%,Nasdaq Composite Indexfell more than 100 points or nearly 1%,S&P 500 Indexdown 0.94%,Philadelphia SemiconductorThe index fell 0.62%.
The United States announced today that the consumer price index (CPI) in June increased by 9.1% compared with last year, which was higher than the market expectation of 8.8%, and once more set a new high in 40 years. The core CPI in June rose by 5.9%, which was also higher than the market expectation of 5.5%. %. After the data came out, U.S. stock futures fell in response.Dow JonesThe futures index fell regarding 300 points;Fingering periodIt fell more than 100 points to touch 14,101 in overnight trading.
In the bond market, the U.S. 10-year Treasury yieldAfter the inflation data was released, it rose in a short period of time, breaking the 3% level once more, and reported 3.047% before the deadline. In addition, the dollar also strengthened.US dollar indexRising above 108, spotgoldShort-term diving, fell below $ 1,720 an ounce, the lowest since August 9, 2021.
The Beige Book, the Fed’s economic sentiment report released later in the day, is also the focus of investors’ attention, but it is expected that even if there are signs of a slowdown in the economy, the Fed’s determination to raise interest rates will not change in the face of higher-than-expected inflation.
With inflation continuing to rise, a rate hike of 3 yards (75 basis points) in July seems imperative, and the market now sees a 30% chance of a rate hike of 4 yards (100 basis points).
As of 21:00 on Wednesday (13th) Taipei time:
Stocks in focus:
Snap(SNAP-US) fell 2.85% to $13.64 a share in early trade
Snap is rolling out a new feature that will allow non-fungible token (NFT) artists to showcase their designs as AR filters on its platform, according to people familiar with the matter. The test, which is by invitation only to a small number of creators, is scheduled to begin at the end of August. Snap has built a roster of creators who will use the platform to create fun AR filters, called Lenses, for users. Creators can mint or create NFTs through third-party services outside the platform, and then transfer them to Snapchat as Lenses.
Novavax (NVAX-US) rose 3.51% to $72.21 a share in early trade
According to the US political news media Politico report, vaccine research and development company Novavax’s new crown vaccine will be approved by the US Food and Drug Administration (FDA) as soon as today, and its shares rose more than 2% in pre-market.
Spirit Airlines (SAVE-US) fell 0.95% to $23.94 a share in early trade
For the fourth time, Spirit Airlines has announced a delay in its partnership with Frontier Airlines (ULCC-US) on the combined voting date. The company’s latest plan is to hold a vote on July 27 so that it can continue with Frontier and JetBlue Airways (JBLU-US) to negotiate a deal. JetBlue’s bid for Spirit was halfway through, throwing the original Frontier deal into question.
Today’s key economic data:
- U.S. CPI in June reported an annual growth rate of 9.1%, expected 8.8%, and the previous value of 8.6%
- US June CPI monthly growth rate was reported at 1.3%, expected 1.1%, the previous value of 1%
- U.S. core CPI in June reported an annual growth rate of 5.9%, expected 5.7%, the previous value of 6%
- The monthly growth rate of the US core CPI in June was 0.7%, expected 0.6%, the previous value was 0.6%
Wall Street Analysis:
Bloomberg analyst Jersey said the higher-than-expected CPI and core CPI data will continue the recent flattening trend of the yield curve, which is still forecast for a sharp 30-point inversion of the 2-year/10-year U.S. Treasury yield curve. The basis point, and may even be inverted further.
Financial Times columnist Michael MacKenzie said U.S. Treasury yields surged following CPI came in higher than expected. Understandably, front-end rates moved first as reports suggested the Fed would tighten monetary policy further, and at the July meeting, the currency swap market indicated that the Fed would hike rates by 80 basis points.
