“US Federal Reserve May Interest Rate Decision and Economic Data Release Impact on Stock Market”

Investors waited for the US Federal Reserve (Fed) to announce its interest rate decision in May later, and waited for more economic data to be released. Major US stock indexes rose and fell on Wednesday (3rd). Traders estimated that the Fed may announce a one-yard rate hike and at the same time signal a pause in rate hikes.

before the deadline,Dow Jones Industrial Averagefell nearly 20 points or nearly 0.1%,Nasdaq Composite Indexrose more than 40 points or nearly 0.4%,S&P 500 Indexup nearly 0.2%,Philadelphia SemiconductorThe index fell nearly 0.8 percent.

The Fed will announce its interest rate decision for May at 2 am Taiwan time on Thursday (4th), and Fed Chairman Jerome Powell will hold a press conference at 2:30 am as usual. The market predicts that the Fed will announce an interest rate hike of 1 yard (25 basis points), and it will be the last rate hike in the coming period. The hike will bring the federal funds rate to a range of 5%-5.25%, the highest level since 2007.

Deutsche Bank economist Matthew Luzzetti pointed out that if the Fed pauses monetary tightening, it will be an “unexpected big event.”The JPMorgan Chase team deduced the performance of US stocks on Wednesday’s decision-making day, US time, and believed that “rate hike and then pause” is the most likely scenario, which may driveS&P 500 IndexUp 0.5%-1%.

The ADP employment report known as “small non-agricultural” far exceeded expectations. The number of new jobs in April reported 296,000, far higher than the 148,000 economists expected and the revised 142,000 previous value. Payroll processing firm ADP pointed to April data showing a hiring spree despite a sharp slowdown in wage growth for those who switch jobs. And it was also a strong job market data, highlighting why the Fed’s job is so difficult.

The lack of clarity on the U.S. debt ceiling added to market uncertainty. Former US Treasury Secretary Larry Summers said yesterday that the banking turmoil was largely over, but he was more concerned about Washington’s deadlock over raising the debt ceiling. An economist at the White House said on the same day that the Fed’s multiple interest rate hikes have had a negative impact on the banking industry, and the Republican Party should not use the debt ceiling as a threat at this time to make the situation worse.

The current U.S. Treasury Secretary Yellen warned on Monday that the Treasury Department has exhausted all special accounting operations that can keep the federal debt within the ceiling, and the government’s debt repayment funds will bottom out at the earliest in early June, which may lead to a catastrophic debt default.

Biden on Monday asked the four leaders of the Senate and the House of Representatives to attend the negotiation meeting next Tuesday (May 9), and Senate Majority Leader Chuck Schumer said on Tuesday that the bipartisan agreement should be passed by June 1. conditional increase in the debt limit bill.

As of 21:00 on Wednesday (3rd) Taipei time:

Focus stocks:

Stellar (STLA-US) fell 2.39 percent in early trade to $15.94 a share

Stellantis, the world’s fourth largest automaker, announced its first-quarter financial report before the market, with revenue increasing 14% year-on-year to 4.72 billionEURfar exceeding the expected 4.581 billionEUR. The company said demand for cars in Europe was healthy and reiterated its full-year forecast for double-digit adjusted profit margins and positive industrial cash flow.

Starbucks (SBUX-US) fell 7.02% in early trade to $106.42 per share

Due to the strong recovery in the Chinese market and strong US sales, Starbucks (Starbucks)’s 2023 fiscal year 2 quarter profit and revenue beat analysts’ expectations, but the leading coffee chain did not raise its full-year financial forecast and is conservative on the outlook The view caused the stock price to plummet 5.5% after hours on Tuesday (2nd).

Supermicro (AMD-US) fell 7.03% in early trade to $83.59 per share

After the market closed on Tuesday (2nd), AMD announced that its financial report for the previous quarter was better than market expectations. However, due to the lackluster outlook for this quarter, the stock price still fell by more than 6% after the market. AMD’s chief financial officer, Jean Hu, expressed confidence in the company’s ability to grow in the second half of the year as the PC and server markets strengthened, coupled with the launch of new products.

When it comes to the prospect of gross profit margin, Hu Jin pointed out that this is mainly driven by the data center and embedded business, because the two have the highest gross profit margin. However, he admits that the speed of improvement in gross profit margin still depends mostly on the customer business group, which needs to be borrowed. Driven by the PC market rebound.

Today’s key economic data:

• U.S. ADP reported 296,000 new jobs in April, compared with 148,000 expected and 142,000 previously
• U.S. April Markit services PMI final value reported 53.6, expected 53.7, previous value 52.6
• U.S. April Markit composite PMI final value reported 53.4, expected 53.5, previous value 52.3
• US April ISM non-manufacturing index reported 51.9, expected 51.8, previous value 51.2

Wall Street Analysis:

Aninda Mitra, head of Asia macro and investment strategy at BNY Mellon Investment Management in Singapore, said the US debt ceiling issue remains a key event risk in the next few weeks or even a month or two. This contributes to the overall sense of defense. In this case, it is recommended that asset allocation be long in fixed income and underweight stocks.

Mizuho strategists Evelyne Gomez-Liechti and Helen Rodriguez said the Fed would raise rates one last quarter (25 yards) before pausing to assess the impact of rapidly tightening monetary policy despite the banking crisis spreading across the regional banking sector. basis points).