Although the latest U.S. personal consumption expenditures (PCE) price index for November showed further cooling in inflation, it was still not enough to stop the Federal Reserve (Fed) from raising interest rates next year. Major U.S. stock indexes opened lower on Friday (23rd).
before the deadline,Dow Jones Industrial Averagefell nearly 150 points or nearly 0.5%,Nasdaq Composite Indexfell more than 80 points or nearly 0.8%,S&P 500 Indexfell nearly 0.5%,Philadelphia SemiconductorThe index fell more than 1.4 percent.
According to data released by the U.S. Department of Commerce, the PCE price index increased by 5.5% in November, in line with market expectations, lower than the revised previous value of 6.3%, slowing down for the fifth consecutive month, but there is still a distance from the Fed’s goal; and The inflation indicator preferred by the Fed, the core PCE price index increased by 4.7% in November, slightly higher than the 4.6% expected by the market, but dropped significantly from the previous value of 5%.
On a monthly basis, the PCE price index grew by 0.1% in November, in line with market expectations, far lower than the revised previous value of 0.4%; the core PCE price index in November increased by 0.2%, in line with market expectations, slightly lower than the revised previous value of 0.3 %.
Although the data showed a further easing of U.S. inflation, recent data also showed that consumers’ inflation expectations for the next year have slowed in December, reinforcing the view that price pressures have peaked in previous months and highlighting the effectiveness of the Fed’s interest rate hike measures Cooling prices and demand, but still far from the target, the Fed will continue to tighten monetary policy in the future, while another data showed that consumer spending stagnated.
U.S. personal spending fell 0.1% in November, lower than market expectations of 0.2% growth, the previous value was revised up to 0.9% from 0.8%, and personal income grew 0.4% in November, higher than market expectations of 0.3%, but lower than the previous value 0.7%. In November, inflation-adjusted real personal spending reported 0%, a seven-month low, lower than the expected 0.1%.
Before the deadline, according to the CME FedWatch Tool, the US federal funds rate futures trading market estimated that the probability of raising interest rates by 1 yard (25 basis points) in February next year was 65.9%, and the probability of raising interest rates by 2 yards (50 basis points) The probability is 34.1%, and the terminal rate falls in the range of 4.75% to 5%.
In addition, the Ministry of Commerce also announced on the same day that the initial value of the monthly growth rate of durable goods orders in November unexpectedly fell by 2.1%, which was far lower than the 0.1% decline expected by the market. It was the lowest since February this year following three consecutive months of growth. The value was revised down from 1.1% to 0.7%; while the initial value of the monthly growth rate of core durable goods orders excluding defense also fell by 2.6%.
As of 22:00 on Thursday (23rd) Taipei time:
Focus stocks:
Tesla (TSLA-US) fell 2.15% in early trade to $122.59 per share
Tesla CEO Musk said that he will no longer sell Tesla shares in the next 18 to 24 months. Musk has sold regarding $39 billion in Tesla stock over the past year, including his $44 billion acquisition of Twitter. Shares of Tesla were up regarding 1.2 percent in premarket trading.
Meta Platforms(META-US) fell 0.32% to $116.74 per share in early trade
Facebook parent company Meta Platforms has agreed to pay $725 million to settle a class-action lawsuit alleging that Facebook allowed third parties such as Cambridge Analytica to access users’ personal information. Shares in Meta rose 0.6 percent in premarket trading.
Biogen(BIIB-US) fell 1.30% in early trade to $276.95 per share
Biogen’s Japanese partner Eisai has confirmed to Archyde.com a third death in a trial of the two companies’ experimental Alzheimer’s drug lecanemab and said it was investigating the cause of death. The news affected Biogen’s pre-market share price fell more than 2%.
Today’s key economic data:
- The revised monthly rate of building permits in the United States in November reported -10.6%, the previous value was -11.2%
- The annualized total number of building permits in the United States in November was revised to 1.351 million units, from the previous value of 1.342 million units
- The monthly rate of personal spending in the United States in November was reported at 0.1%, expected 0.2%, and the previous value was 0.9%
- The monthly rate of personal income in the United States in November was reported at 0.4%, expected 0.3%, and the previous value of 0.7%
- U.S. November PCE price index reported an annual rate of 5.5%, expected 5.6%, and the previous value of 6.1%
- The U.S. November PCE price index was at 0.1%, expected 0.2%, and the previous value was 0.3%
- U.S. November core PCE price index reported an annual rate of 4.7%, expected 4.7%, and the previous value of 5%
- The core PCE price index in the United States reported a monthly rate of 0.2% in November, expected to be 0.2%, and the previous value to be 0.3%
- The initial monthly rate of U.S. durable goods orders in November reported -2.1%, expected -0.6%, and the previous value of 0.7%
- The final value of the U.S. Consumer Confidence Index in December was 59.7, expected 59.1, and the previous value was 59.1
Wall Street Analysis:
Bank of America senior investment strategist Michael Hartnett is optimistic regarding the performance of bonds in the first half of next year, predicting that the economic recession will last for the first 6 to 9 months of next year and will not be too severe or traumatic. Stocks will move slowly higher in the second half of the year once the evidence is clear that the peak in interest rates has passed and corporate profits have bottomed out, he said.
Hartnett also said that once investors start anticipating an economic recovery, the outlook for small caps is “really good,” adding that “we’re not going back to a world of zero interest rates or quantitative easing, where you just own big tech stocks and you’re good to go.” , investors are looking for new frontrunners in the market, which will include small caps.”