The market fears that the determination of major central banks to continue fighting inflation will plunge the economy into recession. In addition, the initial values of the US Purchasing Managers Index (PMI) in manufacturing, services and composite in December were all lower than expected, heightening worries about an economic recession. The major US stock index Five (16) weekly highs and lows.
before the deadline,Dow Jones Industrial Averagefell more than 180 points or nearly 0.6%,NasdaqThe composite index rose 0.13%,S&P 500 indexfell by more than 0.4%,Semiconductor PhiladelphiaThe index rose by 0.2%.
The US Federal Reserve (Fed) and European Central Bank (ECB) have reiterated that interest rates will stay higher for longer before inflation returns to target levels. This dampened market expectations for lower terminal interest rates and a possible rate cut next year, while also casting a shadow over the global economic growth outlook.
Economists now see a 60% chance of a recession in the US and 80% in Europe, while stock market analysts have lowered their 12-month corporate earnings forecasts in these two regions to their lowest levels since March respectively and July. Meanwhile, traders were digesting negative data on U.S. retail sales and manufacturing, although the job market remained strong.
In recent months, the Fed has aggressively raised interest rates several times in a row to reduce inflation. The “bad news for the economic data is good news for the market” logic dominates the performance of US equities. The market believes that poor economic data means the Fed has made some gains in fighting inflation and has cheered accordingly.
However, that logic has reversed as recession fears outnumbered inflation fears. US stocks plunged after Thursday’s weak retail and manufacturing data.That fingerIt closed down 3.23%. Investors began to fear that excessive Fed tightening would push the US economy into a recession. UBS and other Wall Street investment banks have also warned that the market has not yet fully priced in a recession and that US stocks will continue to fall.
S&P Global (S&P Global) announced on Friday that the US December manufacturing PMI came in at 46.2, lower than market expectations and a previous value of 47.7. The services sector PMI performance was also lower than expected 46.2, while the composite PMI was 44.6, lower than market expectations of 47.0 and the previous value of 46.4.
In addition, US equities ushered in the “Four Witch Days” (referring to the settlement of the maturities of four financial derivative products) on Friday. Judging from historical experience, the volume of transactions is bound to explode. At the beginning and end of the day, commodity prices and the stock market will welcome you being violently shaken.
Starting at 22:00 on Friday (16) Taipei time:
Focus on actions:
Metaplatforms(META-USA) rose 4.61% to $121.51 a share in early trading
Facebook and Instagram parent Meta is favored by JPMorgan Chase & Co. The investment bank upgraded Meta’s stock rating from “neutral” (neutral) to “overweight” (overweight), citing increased cost controls and the impact of Apple’s new privacy regulations. Shares of Meta are up nearly 2% in premarket trading.
Adobe(ADBE-US) increased 6.49% to $350.04 per share in early trading
Software company Adobe’s revenue and profit performance in the recent quarter were outstanding, and its share price rose 4.6% ahead of market. According to the financial report, Adobe’s latest quarter revenue was reported at $4.53 billion, in line with market expectations, while adjusted earnings per share were reported at $3.6, which is better than market expectations. In addition, Adobe estimates that adjusted earnings per share for this quarter will be between $3.65 and $3.70, which is better than market expectations of $3.65; Adjusted earnings per share for the year ranged from $15.15 to $15.45, versus expectations of $15.31.
accentura (ACN-USA) fell 3.09% to $272.44 per share in early trading
Shares of consulting firm Accenture fell 1.5% in pre-market trading. While the company reported better-than-expected earnings last quarter, its median revenue forecast for the fourth quarter fell short of Wall Street analysts’ expectations, and they said a stronger dollar would have a 5% impact on earnings results. fiscal year 2023.
Today’s key economic data:
- Initial December US Manufacturing PMI reported 46.2, expected 47.7, expected 47.7
- December US Services Sector PMI Initial 44.4, Expected 46.8, Expected 46.2
- US Composite PMI Initial reported 44.6 in Dec, 47.0 expected, 46.4 expected
Wall Street Analysis:
Stephen Innes, managing partner at SPI Asset Management, wrote in a report that the market is concerned that the Fed’s interest rate hike target is still unknown, while the European Central Bank (ECB) is also pushing interest rates interest rate in a narrow range in addition to the Fed , in the context of an increasingly pessimistic macroeconomic environment, policy tightening will undoubtedly trigger an economic downturn, and the key question is whether the degree of downturn will be mild or severe.
Ann-Katrin Petersen, senior investment strategist at the BlackRock Investment Institute, said central banks are starting to admit they will need to bring inflation down by curbing growth and possibly engineering a recession.
