Investors awaited the latest interest rate decision from the Federal Reserve (Fed) later and paid close attention to the latest corporate financial reports. The major U.S. stock indexes opened higher on Wednesday (1st). In addition, as the fiscal deficit continues to expand, the U.S. Treasury Department slows down the pace of issuance of long-term debt, and U.S. bond yields fall.
before deadline,Dow Jones Industrial Averagerose nearly 30 points or nearly 0.1%,Nasdaq Composite Indexrose more than 60 points or nearly 0.5%,S&P 500 Indexrose nearly 0.3%,Philadelphia SemiconductorThe index gained nearly 0.6%.
USA 10-Year Treasury Bond YieldIt fell 6 basis points to 4.87%, and the 30-year government bond yield fell 10 basis points to 4.9901%. The U.S. Treasury Department announced on Wednesday that the scale of bond issuance in financing operations in the fourth quarter was US$112 billion, an increase of US$9 billion from the third quarter, but lower than market expectations of US$114 billion.
Specifically, the U.S. Treasury Department will auction $48 billion in 3-year U.S. government bonds, $40 billion in 10-year U.S. government bonds, and $24 billion in 30-year U.S. government bonds. Among them, the United States slowed down the issuance of 10-year and 30-year bonds, while the 20-year bond remained stable. The United States said it may increase the scale of coupon bond issuance again next quarter.
In terms of economic data, the October ADP report, known as “small non-agricultural employment”, showed that 113,000 new jobs were created that month, which was far lower than the 150,000 expected by economists, but higher than the previous value of 89,000.
It is worth noting that wages in October increased by 5.7% annually, declining for the 13th consecutive month and hitting a new low since October 2021. In addition, the wages of people who switched to new companies increased by 8.4% annually, which was the smallest increase since July 2021. Both real wage growth rates are still well above the inflation targets set by the Fed.
Investors will next focus on the Fed’s latest interest rate decision announced at 2 a.m. Taiwan time on Thursday, as well as Fed Chairman Jerome Powell’s remarks at the press conference after the meeting.
Analysts believe that Ball’s remarks may cause stock market fluctuations, especially amid the very tense financial conditions in the past six weeks, which caused the Goldman Sachs U.S. Financial Conditions Index to set a new high in more than a year.
A team led by Goldman Sachs economist Jan Hatzius estimates that the recent tight financial market conditions will have an impact on the economy that is equivalent to raising interest rates by 1% (25 basis points) four times. He pointed out that the rise in U.S. bond yields was driven by a reassessment of the neutral rate and an increase in term premiums, so it seemed unlikely to be reversed in the short term.
Although October is usually the most volatile month for U.S. stocks, with stock market crashes occurring in 1929, 1987, and 2008, November has historically been the second strongest month for U.S. stocks, second only to April.
November is the best six-month start for U.S. stocks, according to Stock Trader’s Almanac data, as stock buybacks by companies and pension plans tend to increase starting on November 1, and tax loss recovery deadlines for mutual funds typically is October 31, and the tax loss recovery deadline for personal tax returns is at the end of the year.
As of 21:00 Taipei time on Wednesday (1st): Focus stocks:
Tesla (TSLA-US) rose 1.52% in early trading to $203.89 per share
Musk said on Tuesday that Tesla aims to produce 200,000 Cybertruck electric pickup trucks per year. The company earlier said it has the capacity to produce more than 125,000 Cybertrucks annually. Musk added that this number could increase to 250,000 vehicles by 2025.
Meta Platforms(META-US) rose 0.83% in early trading to $303.78 per share
The European Data Protection Board (EDPB) said on Wednesday (1st) that it had agreed to extend non-EU member Norway’s ban on Facebook and IG “targeted advertising” to all 30 EU and European Economic Area countries. nation. This is undoubtedly a big blow to Meta Platforms, the parent company that owns the two social media platforms mentioned above.
CVS(CVS-US) fell 3.62% in early trading to $66.51 per share
CVS on Wednesday reported third-quarter adjusted profit and revenue that beat Wall Street forecasts, in part due to strong revenue from the company’s health care services business. CVS’s sales in the quarter were US$89.76 billion, an increase of nearly 11% from the same period last year; net profit was US$2.27 billion, or US$1.75 per share, compared with a net loss of US$3.4 billion, or US$2.59 per share, in the same period last year.
Key economic data today: U.S. ADP in October reported 113,000 new jobs, expected 150,000, the previous value was 89,000 U.S. Markit manufacturing PMI in October reported 46.8, expected 50.0, the previous value was 49.8 U.S. ISM manufacturing index in October reported 46.7 , expected 49.0, previous value 49.0 The number of JOLTs job vacancies in the United States in September was reported at 9.553 million, expected 9.25 million, previous value 9.61 million Wall Street analysis:
The latest drop in U.S. stocks, combined with a solid performance so far in the earnings season, hasS&P 500 IndexValuations of constituent companies have moved closer to historical averages. David Kelly of J.P. Morgan Asset Management said that this combined effect provides investors with an opportunity to consider value stocks. However, it takes a cautious view on large technology stocks because the price-to-earnings ratios of these companies are still high compared with historical levels.
Goldman Sachs Group Inc.’s chief global equity strategist said the significant outperformance of U.S. stocks over the past decade is unlikely to be repeated in the next decade. Peter Oppenheimer wrote in a note that the outperformance partly reflects the U.S.’s leadership in technology and the market dominance of a handful of large companies.
2023-11-01 14:01:38
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