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Dollar gains, stocks teeter as US data suggests rates to stay higher

The dollar rose and a gauge of global equities slid on Thursday after data once again highlighted persistent U.S. labor market strength, suggesting the...
HomeLatestThe S&P 500 index has three consecutive yin, and the uncertainty of...

The S&P 500 index has three consecutive yin, and the uncertainty of interest rate hike is fermenting

U.S. stocks opened flat on Tuesday, with the Dow and S&P 500 falling for three straight sessions. As of the close, the Dow fell 154.02 points, or 0.47%, to 32909.59 points; the S&P 500 fell 9.27 points, or 0.22%, to 4128.72 points; the Nasdaq fell slightly by 0.27 points, or less than 0.01%, to 12381.30 points.

Leading tech stocks were mixed. Tesla rose 2.26%, Nvidia rose 0.86%, Amazon rose 0.30%, Meta fell 1.19%, Netflix fell 0.88%, Microsoft fell 0.47%, Alphabet fell 0.33%, and Apple fell 0.20%.

The trend of popular Chinese concept stocks was also divided, and the Nasdaq China Golden Dragon Index rose 0.34%. Zhihu rose 8.40%, Pinduoduo rose 5.38%, Jingdong rose 3.40%, Bilibili rose 2.46%, NetEase rose 2.13%, Baidu rose 1.99%, and Tencent ADR rose 1.84%.

In the falling camp, the new car-making forces suffered a severe setback. Xiaopeng Motors fell 10.81%, Ideal Motors fell 4.83%, and Weilai Automobile fell 3.53%. In addition, iQiyi fell 5.25%, Weibo fell 1.24%, and Alibaba fell 0.22%.

Among the focus stocks, the share price of video conferencing platform Zoom closed down 16.54% as the second-quarter results did not meet revenue expectations. Data showed that Zoom’s revenue in the second quarter was $1.1 billion, lower than analysts’ expectations of $1.12 billion. The company also lowered its outlook for the entire fiscal year, saying the economic situation had led executives to adjust their forecasts. Analysts at Citibank have downgraded the stock, saying Zoom’s outlook is worse than previously expected.

Xiaopeng Motors closed down 10.81%. The company’s latest earnings report showed its net loss widened to 2.7 billion yuan in the three months to June 30, beating analysts’ estimates of 1.94 billion yuan and a 1.19 billion yuan loss a year earlier.

Twitter closed down 7.32%, its biggest one-day drop since July 11. A whistleblower at the company previously reported Twitter to multiple U.S. regulators for “extreme and egregious deficiencies in privacy, security and content moderation.”

Cybersecurity technology company Palo Alto Networks closed up 12.10 percent. Its latest quarterly report showed a sharp increase in sales of 44% month-on-month. The company also raised its quarterly and full-year guidance.

Markets await Powell speech

All eyes are now on the annual meeting of global central banks in Jackson Hole, Wyoming. Federal Reserve Chairman Jerome Powell is expected to provide clues on the direction of the central bank’s policy to combat high inflation on Friday at a speech at the annual meeting.

Goldman Sachs expects Powell to remain hawkish at the annual meeting but will reiterate the case for slowing the pace of tightening; he is likely to stress that the Fed remains committed to lowering inflation and that future policy decisions will depend on economic data. Goldman Sachs expects the Fed to raise rates by 50 basis points in September and 25 basis points each in November and December.

According to foreign media reports, St. Louis Fed President Bullard and Minneapolis Fed President Kashkari expressed in mid-July in favor of adjusting the emergency lending rate of commercial banks by a full percentage point.

Hawkish comments from Fed officials have boosted investors’ expectations that the central bank will continue to aggressively raise interest rates. Streit, senior market analyst at Hargreaves Lansdown, a British investment advisory platform, believes that the excitement surrounding U.S. stocks has subsided a bit. “The voices of Fed policymakers have become louder, they are saying, wait, we are not out of the woods yet. .”

Previously, thanks to the stellar corporate earnings reports, U.S. stocks have gradually recovered from their lows in June. More than 90 percent of the S&P 500 companies have released their latest quarterly reports. Analysts expect the profits of U.S. stock-listed companies to increase by 6.2 percent year-on-year in the second quarter. . U.S. inflation data also showed signs of easing, stoking expectations that the Federal Reserve will slow the pace of interest rate hikes. The previously released U.S. CPI rose 8.5% in July from a year earlier, down from 9.1% in June, the highest in four decades.

Composite PMI, new home sales data both down

On the data front, the U.S. Composite Purchasing Managers’ Index (PMI), which measures activity in the manufacturing and services sectors, fell to 45.0 in August, the second straight monthly decline and the lowest level since May 2020. A value below 50 indicates entering into contraction territory.

U.S. new home sales fell 12.6% month-on-month in July, the sixth decline this year and the lowest level since early 2016.

Stephanie Lang, chief investment officer of US asset management agency Homrich Berg, said that her institution has reduced its holdings of US stocks in recent weeks, “We believe that based on economic data and the Fed’s obsession with raising interest rates, the risk of an economic recession is high. “

Richard Hunter, head of markets at Interactive Investor, said that for now, the market sentiment is both fearful and volatile, “there is little reason for optimism at the moment, and any glimmer of economic hope has not been obtained on a sustainable basis. strengthen.”

International oil prices rise, U.S. natural gas prices fall

WTI October crude oil futures closed up $3.38, or 3.74%, at $93.74 a barrel. Brent October crude oil futures closed up $3.74, or 3.88%, at $100.22 a barrel, the first closing price since August 2 above $100 a barrel. Earlier, Saudi Arabia’s energy minister said in an interview that OPEC+ may cut production.

U.S. natural gas prices fell, with NYMEX September natural gas futures closing down 5.03% at $9.1930 per million British thermal units. The operator of a key export terminal damaged in an explosion earlier this year announced a delay to the restart schedule.

In addition, the U.S. 10-year Treasury yield rose to 3.053%, rising for the third straight session.