Surprisingly strong employment data last week raised the possibility of the Federal Reserve raising interest rates. Investors are waiting for more earnings reports this week and subsequent comments from Fed Chairman Jerome Powell. The major US stock indexes on Monday ( 6) fell in early trading,Dow Jones Indexdown 0.3%,S&P 500 Indexdown 0.5%,NasdaqThe index fell 0.77%,fee halfThe index fell 1.29.
Investors are also taking profits after the stock market rallied strongly to start the year. S&P 500 IndexIt has risen by more than 7% this year.Nasdaq Composite IndexIt has risen continuously in the past 5 weeks.
The dollar continued to gain on Monday after surging more than 1% on Friday. Due to the exceptionally good employment data, the unemployment rate hit a 53-year low, suggesting that inflation may persist, supporting further interest rate hikes in the future. Rand Merchant Bank economists released a report that this number undoubtedly provides investors with another factor to consider when predicting the direction of the Federal Reserve in the coming months.
Chinese stocks were set to fall for a third straight session after Washington shot down a surveillance balloon it said was from China, sparking fresh tensions between the two countries.
Earnings season is halfway through, with S&P 500 companies on track for a 2.7 percent drop in fourth-quarter profits, according to Refinitiv data.
Markets could be on edge ahead of Powell’s speech Tuesday at the Economic Club of Washington. Powell’s comments on deflation caused investors to ignore the possibility of the central bank raising interest rates last week and continued to chase stocks.
As of 22:00 on Monday, Taipei time:
- Dow Jones IndexDown 101.48 points or 0.3%, tentatively reported at 33824.53 points
- NasdaqDown 92.28 points or 0.77%, tentatively at 11914.68 points
- The S&P 500 fell 20.65 points, or 0.5%, to 4115.83
- fee halfDown 39.75 points or 1.29%, tentatively at 3042.36 points
- TSMC ADR fell 2.74% to $91.97 per share
- 10-Year U.S. Treasury YieldUp 9 basis points to 3.61%
- N.Y. Light crude rose 1.25% to $74.31 a barrel
- Brent Crude OilUp 1.49% to $81.13 a barrel
- goldUp 0.4% to $1,885 an ounce
- dollar indexUp 0.04% to 103.31
Focus stocks:
Dell (DELL-US) down 2.9 percent to $41.01
Dell (DELL) has become the latest technology company to announce thousands of layoffs, announcing it will cut about 6,650 jobs amid slumping global demand for personal computers (PCs).
The layoffs represent about 5% of the global workforce, a Dell spokesman said. After layoffs, the total number of employees will hit a six-year low.
Tyson Foods (TSN-US) down 5.83 percent to $60.30
Tyson Foods missed Wall Street’s revenue expectations for the quarter, citing lower beef prices and lower sales in its pork division.
While soaring beef, chicken and pork prices boosted Tyson’s sales last year, the company reported an 8.5% drop in the average selling price of beef during the quarter.
apple (AAPL-US) down 1.27 percent to $152.54
Apple has reportedly cut the price of its latest iPhone by more than $100 in China. Between February 5 and 15, retailers such as JD.com are cutting prices on the iPhone 14 Pro series by 800 yuan ($118). An Apple retailer in Shenzhen also started to cut the price of the same phone by 700 yuan.
Daily key economic data:
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Wall Street Analysis:
Karl Chalupa, chief executive of Gamma Investment Consulting, said corporate earnings could deteriorate further as the economy slows later this year, and the bull market may not have started yet as stock prices have not corrected to proper valuations.
On average, a new bull market kicks in when stocks are 25% undervalued, at current valuations, he noted.S&P 500 IndexIt needs to fall below 3,500 points to reach the fair value. If it is to be undervalued by 25%, then it must fall to around 2,200 points.
Regarding the prospects of U.S. stocks, Goldman Sachs believes that regardless of fundamentals or technical aspects, the bullish market for U.S. stocks may continue. No matter how bearish the outside world is on U.S. stocks, Goldman Sachs believes that the S&P 500 still has room to rise, looking at 4300 points.
