The market digested another batch of strong economic data and financial reports. The main U.S. stock index rose sharply on Thursday (19th), with stocks dominated by technology stocks.NasdaqThe index rose 1.35%.S&P 500 Index rose 0.88%,Dow JonesIt closed over 230 points in red, ending three consecutive blacks. The VanEck Semiconductor ETF rose more than 3% to hit a record high.
Apple led technology stocks higher, and TSMC soared nearly 10% after announcing its financial report, pushing semiconductor stocks to strengthen. However, Humana warned that medical costs will impact this year’s financial forecast, triggering a general decline in medical insurance stocks.
Thursday as a new round of employment data showed continued tightness in the labor market. 10-Year Treasury Bond YieldHovering around 4.15%, the dollar ended flat and oil prices extended their gains.
Data released earlier on Thursday showed that the number of people claiming unemployment benefits unexpectedly fell to the lowest level since September 2022, indicating that job growth may remain solid in January. In the week ending January 13, initial claims for unemployment benefits dropped by 16,000 from the previous week to 187,000, the lowest level since September 2022.
On the other hand, the Philadelphia Federal Reserve Bank’s manufacturing index in January was negative 10.6, while the market expected it to be negative 7, still in the contraction range. This is hardly a strong endorsement of the state of the U.S. manufacturing industry.
Atlanta Fed President Raphael Bostic reiterated his expectation that policymakers will not cut interest rates until the third quarter, hoping to see more evidence that inflation is moving toward the central bank’s 2% target.
Bostic expects the first rate cut to come sometime in the third quarter of this year, and the Fed will have to watch how the data develops. Bostic is a member of the 2024 Federal Open Market Committee (FOMC) voting committee. According to CME’s FedWatch tool, the market currently predicts a 56% chance of a 1-cent rate cut in March.
The team led by JPMorgan analyst Jay Barry pointed out in the latest research report that due to signs of shortages of important systemic and inter-bank liquidity, in order to avoid a recurrence of the “liquidity” crisis, it is predicted that the Federal Reserve will begin discussions in January Slow down the QT, announce in March, officially start to slow down the balance sheet reduction in April, and stop the balance sheet reduction in November.
The World Economic Forum Annual Meeting (also known as the Davos Forum) was held in Davos, Switzerland from January 15 to 19. Jamie Dimon, CEO of JPMorgan Chase, remained cautious about the performance of the U.S. economy this year and next. , the main reason is to consider the Russia-Ukraine war, the Israel-Kazakhstan war, the Red Sea crisis, and quantitative tightening.
The Red Sea crisis continues. U.S. President Biden said that the Houthi armed forces have continued to attack merchant ships in the Red Sea, and the U.S. military will launch a new wave of attacks on them.
Performance of major U.S. stock indexes on Thursday (19th):
- US stocksDow Jones IndexIt rose 201.94 points, or 0.54%, to close at 37,468.61 points.
- NasdaqThe index rose 200.03 points, or 1.35%, to close at 15,055.65 points.
- S&P 500 IndexIt rose 41.73 points, or 0.88%, to close at 4,780.94 points.
- Philadelphia SemiconductorThe index rose 136.57 points, or 3.36%, to close at 4,206.52 points.
- The NYSE FANG + index rose 117.92 points, or 1.36%, to close at 8,799.05 points.
Seven of the 11 major S&P sectors ended in the red, with technology and communications services leading the way. Utilities and real estate saw the biggest declines. (Image: finviz) Focus Stocks
The five tech kings in the NYSE FANG+ index were collectively higher. apple (AAPL-US) rose 3.26%; Alphabet (GOOGL-US) rose 1.42%; Meta (META-US) rose 2.11%; Microsoft (MSFT-US) rose 1.13%; Amazon (AMZN-US) rose 1.18%.
Dow JonesMore than half of the constituent stocks closed in the red. Boeing (BA-US) rose 4.21%; Disney (DIS-US) rose 2.07%; Walmart (WMT-US) rose 1.35%; Kaifeng Heavy Industry (CAT-US) rose 1.17%; UnitedHealth (UNH-US) 1.64%。
half feeComponent stocks were generally higher. Micron (MU-US) rose 1.85%; AMD (AMD-US) rose 1.56%; Broadcom (AVGO-US) rose 3.65%; Qualcomm (QCOM-US) rose 4.29%; Huida (NVDA-US) rose 1.88%; Applied Materials (AMAT-US) rose 4.54%; Deyi (TXN-US) rose 2.77%.
Taiwan stock ADRs all rose. TSMC ADR (TSM-US) soared 9.79%; ASE ADR (ASX-US) rose 4.87%; UMC ADR (UMC-US) rose 1.96%; Chunghwa Telecom ADR (CHT-US) rose 0.80%.
Corporate News
Wafer foundry leader TSMC ADR (TSM-US) surged 9.79% to US$113.03 per share, with a discount and premium rate of 21.39%, and a conversion price of 713.78 yuan. TSMC has forecast that its revenue will grow by at least 20% this year. Revenue growth is promising, and it is confident that its gross profit margin will be maintained at 53% this year. This move has won applause from foreign investors.
(Image: Apple)
Goldman Sachs analysts including Bruce Lu wrote in the report, “We are optimistic about TSMC because we believe its solid technology leadership and execution capabilities are better than peers to capture the long-term structural growth of the industry, especially in 5G. Or fields such as artificial intelligence (AI).”
Other semiconductor stocks include Huida (NVDA-US)、AMD (AMD-US) Wamimitsu (MU-US) subsequently moved higher by more than 1%.
apple (AAPL-US) rose 3.26% to $188.63 per share, its best single-day performance since May. Bank of America (BofA) analysts are optimistic about the potential of AI and the upcoming Vision Pro device, raising their investment rating and target price on Apple stock. Separately, a federal appeals court ruled on Wednesday that Apple watches with blood oxygen detection capabilities cannot be imported into the United States. Apple will start selling watches without blood oxygen detection function on January 18th.
Morgan Stanley to Hertz (HTZ-US) stock was upgraded to “overweight” from “overweight,” an upgrade related to improved risk-reward after the sharp sell-off, and its stock price surged 7.54% to $8.99 per share.
Humana (HUM-US) fell 7.99% to $411.98 per share as the company lowered its 2023 net earnings per share forecast due to further increases in medical cost trends. Peers United Health Group (UNH-US) 、Elevance Health (ELV-US) and CVS Health (CVS-US) also generally fell.
Tesla (TSLA-US) closed 1.70% lower at $211.88 per share. After Tesla lowered the prices of some electric vehicles in China last week, it also decided to cut the price of Model Y in Europe, including Germany, prompting analysts to be bearish on demand this year.
India’s Akasa Air has ordered 150 Boeing 737 MAX aircraft to expand its domestic and international operations, Boeing (BA-US) rose 4.21% to $211.61 per share.
Economic data
- The number of people claiming unemployment benefits in the United States last week was 187,000, compared with the expected 207,000, and the previous value of 203,000
- The number of people continuing to receive unemployment benefits in the United States last week was 1.806 million, which was expected to be 1.845 million, and the previous value was 1.832 million
- The Philadelphia Fed Manufacturing Index in January was -10.6, expected -7.0, and the previous value -12.8
Wall Street Analysis
Baird investment strategy analyst Ross Mayfield pointed out that technology stocks were boosted by TSMC’s financial forecast, and the forward guidance for semiconductors and AI was so positive that most companies were trading. You can see the price action moving in this direction.
Citi analysts revised their forecasts in a report on Thursday that the first rate cut by the Federal Reserve will occur in June, a month earlier than previously. Analysts expect global economic growth to slow to “well below trend” this year and inflation to fall to central bank targets. The headwinds brought about by the recent tightening of monetary policy will continue to dampen the global economy.
Chris Toomey, managing director of Morgan Stanley, warned: “It is a good thing that the Federal Reserve has not talked about raising interest rates, but the market’s pricing of six interest rate cuts is a problem. Looking at the performance of U.S. stocks in the fourth quarter, many are chasing gains. As a result, if interest rates start to move higher, you’re going to see a lot of weak selling.”
Michael Kramer, portfolio manager at Mott Capital Management, believes: “U.S. stocks have been stagnant since the end of 2023. Currently, with the expiration of options this Friday, a large amount of safe-haven funds will be released, and the release of economic data supports a lower number of interest rate cuts than the market It is expected that the stock market may usher in a window of opportunity for a sharp correction.”
The figures are all updated before the deadline, please refer to the actual quotation.
2024-01-18 21:43:11
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