Mixed Earnings Season and Debt Ceiling Negotiations Weigh on US Stocks while Federal Reserve Policy Remains a Focus

Investors continued to digest the mixed earnings season, debt ceiling negotiations reached an impasse, US stocks closed weakly on Friday (19th), financial stocks underperformed. The S&P closed black 0.14%, snapping a second straight session of gains.Dow Jonesdown more than 100 points.That fingerfell 0.24%,fee halfReceive black 0.62%.

Looking at this week’s performance,Dow JonesThe weekly increase reached 0.38%,That fingerThe S&P 500 and the S&P closed 3% and 1.6% respectively this week, their best week since March.

On the political and economic front, the U.S. Republicans and Democrats suspended talks on raising the debt ceiling on Friday, and financial markets were jittery as the deadline for the debt ceiling drew closer.

Rep. Garret Graves, R-Louisiana, said negotiations were on hold because they were ineffective and said it was unclear whether talks would resume over the weekend. Graves was appointed by US House Speaker Kevin McCarthy to represent the Republican negotiators.

“There are real bipartisan differences on the budget, and negotiations will be difficult. The Biden team is working hard to get a reasonable bipartisan solution that can be voted on in the House and Senate,” the White House official said.

U.S. President Joe Biden is expected to return home from the G7 summit in Japan on Sunday and hold a press conference.

The market continues to focus on the outlook for the Federal Reserve’s monetary policy. Federal Reserve Chairman Jerome Powell said on Friday that price stability is the cornerstone of a strong economy, and maintaining price stability is the responsibility of the central bank. US inflation is much higher than the 2% target. In view of credit pressure May not need to continue to raise interest rates.

U.S. Treasury Secretary Janet Yellen told top bank executives on Thursday that more bank consolidation may be necessary as several regional lenders continue to fail, the sources said.

The performance of the four major indexes on Friday (19th):

Focus stocks

The five kings of science and technology collect more hackers. Amazon (AMZN-US) down 1.61%; Meta (META-US) down 0.49%; Apple (AAPL-US) rose 0.06%; Alphabet (GOOGL-US) down 0.06%; Microsoft (MSFT-US) fell 0.06%.

Dow JonesComponent stocks were mixed. Nike (OF THE US) fell 3.46%; Disney (DIS-US) down 2.57%; Home Depot (HD-US) down 1.45%; Merck (MRK-US) rose 1.31%; Cisco (CSCO-US) rose 1.93%.

fee halfMore than half of constituent stocks were lower. AMD (AMD-US) fell 1.95%; Huida (NVDA-US) down 1.31%; Micron (MU-US) rose 0.89%; Applied Materials (AMAT-US) fell 2.29%; Texas Instruments (TXN-US) rose 0.18%; Qualcomm (QCOM-US) fell 1.03%.

Taiwan stocks ADR only Chunghwa Telecom received red. TSMC ADR (TSM-US) down 0.08%; ASE ADR (ASX-US) fell 1.34%; UMC ADR (UMC-US) fell 2.18%; Chunghwa Telecom ADR (CHT US) rose 0.83%.

Corporate News

Morgan Stanley (MS-US) plunged during intraday trading on Friday, closing down 2.66% to $82.24 per share.

Footwear retailer Foot Locker (FL-US) plunged more than 27% to $30.21 a share, the biggest drop since February 2022. Foot Locker’s latest financial forecast is worse than expected, with sales down 9% year-on-year, and the full-year profit per share forecast has been greatly reduced from the previous $3.35 to $3.65 to a range of $2.00 to -$2.25.

Foot Locker trend drags down Nike (OF THE US) down 3.46%, Under Armor (UAA-US) closed down 4.20%.

Deere (FROM US) fell 1.88% to $363.55 per share. Deere announced its financial report for the second quarter of the 2023 fiscal year on Friday. Due to the strong sales of tractors and other agricultural equipment, the company’s revenue and profit in the quarter were better than Wall Street analysts expected, and it was optimistic about the strong future orders and raised its full-year financial forecast. .

Wall Street Analysis

“With the pause in debt-ceiling talks hampering the chances of a workable deal by early June, it will reduce the chances of the Fed raising rates on June 14,” said Quincy Krosby, chief global strategist at LPL Financial. Monetary policy meeting will be held from 13th to 14th.

The UBS strategist team warned: “If the US fails to raise the debt ceiling and delay payments, US stocks are forecast to plummet, and the S&P will plunge 20% to about 3,400 points.”

“There’s some uncertainty about when the federal government will run out of money and default, but in the long run the end result won’t be too damaging to the market,” analysts at BMO Wealth Management said.

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