Investors assessed the latest data that labor costs are slowing, adding to hopes that the Federal Reserve (Fed) will slow down the pace of interest rate hikes, but bleak corporate earnings continued to unnerve investors, and major US stock indexes opened higher on Tuesday (31st).
before the deadline,Dow Jones Industrial Averagerose more than 30 points or nearly 0.1%,Nasdaq Composite Indexrose more than 50 points or nearly 0.5%,S&P 500 Indexup nearly 0.3%,Philadelphia SemiconductorThe index rose nearly 0.6 percent.
The Employment Cost Index (ECI), the broadest measure of labor costs, rose 1 percent in the fourth quarter of last year, a slowdown from a 1.2 percent rise in the third quarter, the Labor Department said on Tuesday. The Fed and economists generally agree that the ECI is one of the better measures of the labor market and a predictor of core inflation because it adjusts for changes in the composition and quality of employment. The report comes as Fed officials begin a two-day monetary policy meeting.
In terms of corporate financial reports, chip manufacturers continued to lead the decline in pre-market trading, and NXP Semiconductors (NXPI-US) fell more than 4% after reporting disappointing last-quarter results. Kintor Heavy Industries (CAT-US), Pfizer, and McDonald’s fell short of expectations, and their stock prices fell one after another. However, General Motors (GM-US) saw a surge in profits in the last quarter, and its financial forecast for this year is impressive. The stock price rose by more than 5%.
Signs of pressure on corporate profits complicated sentiment among investors who wanted the Fed to slow down its aggressive cycle of rate hikes.S&P 500 IndexEarnings per share estimates have fallen since peaking in June 2022, while revenue forecasts are flat. Margins are under pressure as slowing inflation erodes pricing power.
It is widely expected that the Fed will raise interest rates by 1 yard (25 basis points), and this week’s decision is the key to affecting the stock market. Investors will focus on the tone set by officials’ upcoming meetings after Fed Chairman Jerome Powell’s ongoing efforts to thwart traders forecasting a rate cut later this year. The rebound in U.S. stocks this month shows that so far, the market has ignored Powell’s warning to “keep interest rates high for a long time.”
In other news, Eurostat released TuesdayEURAccording to the preliminary value of the region’s gross domestic product (GDP) in the fourth quarter of last year, 20EURThe region’s GDP grew by 0.1%, higher than the previous market forecast of -0.1%, but down from the previous reading of 0.3%. Despite energy shocks,EURThe region’s economy performed better than expected in the fourth quarter of last year and is expected to avoid a recession.
As of 22:00 on Tuesday (31st) Taipei time:
Focus stocks:
Tesla (TSLA-US) rose 0.98 percent to $168.29 a share in early trade
According to Tesla’s 10-K filing submitted to the US Securities and Exchange Commission on Tuesday, Tesla’s total revenue last year was 81.462 billion US dollars, an annual increase of 51%. Among them, the Chinese market achieved revenue of US$18.145 billion, accounting for 22.27% of total revenue; the US market achieved revenue of US$40.553 billion, accounting for 49.78%, which is still Tesla’s largest market; other markets’ revenue was US$22.764 billion, The proportion is 27.75%.
In terms of proportion, the revenue of the Chinese market has declined. In 2021, the revenue of the Chinese market will account for about 26%, and this figure will be 21% in 2020. In terms of growth rate, the Chinese market also lags behind the overall market. The annual revenue growth rate of the US market in 2022 is as high as 69.09%, the revenue of other markets increased by 42.22% last year, and the revenue of the Chinese market increased by 31.07% compared with 13.844 billion US dollars in 2021.
Pfizer (PFE-US) fell 0.53% to $43.32 per share in early trade
US pharmaceutical company Pfizer reported revenue of US$24.3 billion in the fourth quarter of last year, slightly higher than market expectations of US$24.23 billion; its adjusted profit per share reported US$1.14 in the previous quarter, compared with US$1.08 in the same period last year. Pfizer expects this year’s revenue to be between $67 billion and $71 billion, lower than Wall Street analysts’ forecast of $71.75 billion; it is expected that this year’s adjusted profit per share will be between $3.25 and $3.45, which is also lower than analysts’ expectations estimated $4.31.
McDonald’s (MCD-US) fell 1.95% in early trade to $265.61 per share
McDonald’s announced its last-quarter financial report before the U.S. stock market opened on Tuesday, with revenue of US$5.93 billion and earnings per share of US$2.59, both of which were better than Wall Street analysts’ expectations of US$5.68 billion and US$2.45. The company’s fourth-quarter net income was $1.9 billion, or $2.59 a share, up from $1.64 billion, or $2.18 a share, a year earlier.
Net sales fell 1 percent to $5.93 billion, but rose 5 percent excluding currency changes. Globally, same-store sales rose 12.6 percent in the quarter, driven by strong demand in the U.S. and its largest market, Europe.
Today’s key economic data:
- In the fourth quarter of last year, the quarterly rate of labor employment costs in the United States was reported at 1%, which was expected to be 1.1%, and the previous value was 1.2%.
- In the fourth quarter of last year, the quarterly rate of labor employment and wages in the United States was reported at 1%, the previous value was 1%
- In the fourth quarter of last year, the quarterly rate of labor employment benefits in the United States was reported at 0.8%, the previous value was 1%
- The monthly rate of the FHFA house price index in the United States in November last year was -0.1%, expected -0.4%, and the previous value was 0%
- The annual rate of the FHFA house price index in the United States in November last year was 8.2%, the previous value was 9.8%
- U.S. Chicago PMI reported 44.3 in January, expected 45, previous value 45.1
- The American Institute of Economic Research’s January consumer confidence index reported 107.1, expected 109, and the previous value of 108.3
Wall Street Analysis:
Willem Sels, investment director at HSBC Global Private Bank, said the prospect of interest rates stabilizing at 5% after March is shifting market focus from interest rates to corporate earnings growth, so there will be mixed results for companies in the coming weeks Will continue to lead to some volatility, take a neutral view on US stocks.
Sophie Lund-Yates, chief equity analyst at Hargreaves Lansdown, said that in the short term, major US stock indexes are collapsing under the pressure of the Fed’s imminent interest rate hike. As the outcome of the decision looms, there will inevitably be some small fluctuations in the stock market, but these fluctuations should not be long-lasting.