Stock Market Update: US President Joe Biden Vows to Avoid Default, Target Exceeds Earnings Expectations as Regional Banks Rally

U.S. President Joe Biden has vowed to emphasize that “the U.S. will not default,” giving the stock market a pinch. Coupled with the earnings report of the target department store exceeding expectations, the main U.S. stock index is in full swing on Wednesday (17th).

Regional banks rallied, with Western Alliance Bancorp’s deposit growth of more than $2 billion since the end of last quarter eased concerns. Tesla shares have soared more than 4.4 percent since the annual shareholder meeting. Japan invited high-level semiconductor executives for talks, pushing TSMC’s ADR to soar by nearly 6%.

All four major indexes closed in the red on Wednesday, Dow JonesSoared more than 400 points. The S&P rebounded more than 1%, almost erasing the decline since the beginning of this month,That fingerIt rose nearly 1.3%, returning to its high on August 25 last year.fee halfStrongly rose nearly 2.5%.

In terms of data, US housing starts rose 2.2% in April, higher than market expectations of a 1.4% drop, and the previous value fell 0.8%. Housing starts in April were 1.401 million units, higher than the expected 1.40 million units and higher than March’s 1.371 million units, showing that the residential real estate market is gradually recovering.

On the political and economic front, U.S. President Joe Biden and House Speaker Kevin McCarthy (Kevin McCarthy) reiterated on Wednesday that they are determined to reach an agreement as soon as possible to avoid a financial disaster caused by a debt default.

Biden departed for the G7 summit in Hiroshima, Japan on Wednesday, but he will cut short his trip to Asia, cancel visits to Australia and Papua New Guinea, and return to the U.S. on Sunday to ensure the debt ceiling is reached as the debt ceiling issue remains protocol.

U.S. Senate Democratic leader Schumer (Chuck Schumer) met with top U.S. banks on Wednesday to discuss the federal debt ceiling. JPMorgan Chase Chief Executive Jamie Dimon said after the meeting that the U.S. should not, and likely will not, default and the bank will be prepared no matter what the outcome.

The performance of the four major indexes on Wednesday (17th):

• US stocksDow Jones IndexIt gained 408.63 points, or 1.24%, to close at 33,420.77.
• NasdaqThe index rose 157.51 points, or 1.28 percent, to close at 12,500.57.
• S&P 500 IndexIt gained 48.87 points, or 1.19 percent, to close at 4,158.77.
• Philadelphia SemiconductorThe index rose 75.98 points, or 2.49 percent, to close at 3,124.68.

Focus stocks

The five kings of science and technology all received red. Amazon (AMZN-US) up 1.85%; Meta (META-US) rose 1.53%; Apple (AAPL-US) rose 0.36%; Alphabet (GOOGL-US) rose 1.11%; Microsoft (MSFT-US) up 0.95%.

Dow JonesConstituent stocks closed higher. The Home Depot (HD-US) rose 3.56%; JPMorgan Chase (JPM-US) rose 3.07%; Boeing (BA-US) up 2.99%; Merck (MRK-US) down 1.14%; Intel (INTC-US) fell 1.2%.

fee halfComponent stocks generally rebounded strongly. AMD (AMD-US) rose 2.24%; Huida (NVDA-US) up 3.30%; Micron (MU-US) rose 1.87%; Applied Materials (AMAT-US) rose 3.95%; Texas Instruments (TXN-US) rose 1.20%; Qualcomm (QCOM-US) rose 0.98%.

ADRs of Taiwan stocks rose collectively. TSMC ADR (TSM-US) up 5.82%; ASE ADR (ASX-US) rose 3.43%; UMC ADR (UMC-US) rose 2.15%; Chunghwa Telecom ADR (CHT US) up 0.64%.

Corporate News

TSMC ADR (TSM-US) soared 5.82% to US$90.88 per share, the conversion price was 560.09 yuan, and the discount premium rate reached 7.92%. On the 18th, Japanese Prime Minister Fumio Kishida met with senior executives of major chip manufacturers such as Intel of the United States, TSMC of Taiwan, and Samsung of South Korea, hoping that these international giants can expand their factories and cooperation in Japan.

AMD (AMD-US) surged 2.24% to $103.75 per share. Stacy Rasgon, an analyst at investment bank Bernstein, said the PC market appears to be normalizing to pre-epidemic levels, and the market is expected to improve by the end of the year. Rasgon reiterated AMD’s “market-perform” rating on the stock and a price target of $80 per share.

Tesla (TSLA-US) surged 4.41% to US$173.86 per share. Tesla CEO Musk mentioned at the annual shareholder meeting that the economy is expected to recover after 12 months, and Tesla will be in a good position by then. Cybertruck will be mass-produced and delivered later this year. The Model Y is predicted to be the best-selling car on the surface this year.

US retail giant Target (Target) (TGT-US) rose 2.58% to $160.96 per share. Target department store’s latest financial report is better than market expectations, but the sales forecast for the second quarter will remain sluggish, and the adjusted profit per share for the whole year will be between US$7.75 and US$8.75.

Broadcom (AVGO-US) received a dividend of 2.50% to $657.47 per share. Broadcom made antitrust commitments to the European Commission, allaying concerns over its planned $61 billion takeover of VMware. Broadcom on Wednesday reiterated its goal of completing the VMware acquisition in fiscal 2023.

WeWork (WE-US) announced that CEO Sandeep Mathrani will step down at the end of the month, and the news of his resignation triggered a 24.71% plunge in its stock price to $0.26 per share.

Economic data

• The initial value of the monthly rate of building permits in the United States in April was -1.5%, expected -0.2%, and the previous value was -3.0%
• The initial value of the annualized total number of building permits in the United States in April was 1.416 million units, expected to be 1.437 million units, and the previous value was 1.437 million units
• The annualized monthly rate of new housing starts in the United States in April was 2.2%, expected – 1.7%, and the previous value was – 4.5%
• The annualized total of U.S. housing starts in April was 1.401 million, compared with 1.40 million expected and 1.371 million previously

Wall Street Analysis

“We don’t want to get too excited as the two sides are reportedly still at odds, but they are trying to avoid a debt ceiling disaster as the June 1 date approaches,” said Win Thin, global head of currency strategy at Brown Brothers Harriman.

Andrew Hollenhorst, chief U.S. economist at Citigroup, said: “The meeting between Biden and McCarthy is proceeding as reasonably hoped, with continued expectations for a long-term agreement to resolve the debt ceiling.”

Deutsche Bank strategist Jim Reid judged: “Given the aggressive rate hikes and the inverted U.S. yield curve, we think the U.S. economy will experience a recession rather than a soft landing.”

Seamus Mac Gorain, head of global interest rates at JPMorgan Chase, said: “The market is correct in anticipating a rate cut. Inflation is too high, and only a recession can bring it down. It is judged that US debt is the ultimate hedge against an economic slowdown.”

The numbers are all updated before the deadline, please refer to the actual quotation