U.S. bond yields rose again, and the four major U.S. stock indexes closed sharply lower on Wednesday (19th) after investors evaluated the latest quarter corporate financial forecasts and profit results.Dow Jones IndexIt closed down more than 300 points, with the VIX fear index rising as tensions in the Middle East heightened risk aversion.
USA 10-Year Treasury Bond YieldIt once rose above 4.9%, the first time since 2007. At the same time, the average interest rate on 30-year fixed mortgages also reached 8%, the highest level since mid-2000.
Large-cap stocks fell under pressure from U.S. Treasury yields,S&P 500 IndexIt closed 1.3% lower at the end, with Tesla (TSLA-US) closed down nearly 5%,that fingerandhalf feeThey closed down 1.6% and 1.7% respectively.
Huida (NVDA-US) and Super Micro (AMD-US) and other chip stocks performed poorly for two consecutive trading days, with Huida closing down nearly 4% and Super Micro down nearly 3%. The U.S. Department of Commerce previously announced plans to tighten restrictions on the sale of artificial intelligence (AI) chips to China.
As the conflict between Israel and Hamas continues, investors are worried about the broader impact of instability in the Middle East on the market. An airstrike on a hospital in Gaza recently killed at least 500 people, and the Quad summit planned by US President Joe Biden with the leaders of Jordan, Egypt and Palestine was canceled as a result.
Iran has called for a comprehensive oil embargo against Israel and urged Islamic countries to expel the Israeli ambassador after airstrikes on Gaza hospitals. As soon as the remarks came out, West Texas Intermediate crude oil (WTI) futures were close to US$90 per barrel, and then gave up some of the gains. They rose 2% to US$87.18 per barrel at the time of writing.Brent crude oilFutures rose 1.6% to $91.34 a barrel.
Oil traders are increasingly concerned that the conflict between Israel and Hamas will spread further, involving major oil exporter Iran and its Lebanese ally Hezbollah.
Traders are also watching comments from Federal Reserve officials and the latest Beige Book for clues on the central bank’s next move. The Fed’s Beige Book shows that the U.S. economic outlook is stable, or there may be a slowdown in growth. The tight labor market situation continues to ease, and companies predict that prices will continue to rise in the next few quarters, but the growth rate will be lower than in previous quarters.
New York Fed’s John Williams said interest rates must remain at restrictive levels for some time to get inflation back to the central bank’s target. At the same time, Fed Governor Christopher Waller pointed out that whether further tightening of monetary policy is needed can be decided after more data is released. Fed Chairman Jerome Powell will deliver a speech at the Economic Club of New York on Thursday (19th).
In the corporate earnings section, Morgan Stanley (MS-US) fell 6.8%, the largest one-day drop since 2020. United Airlines (UAL-US) also fell nearly 10% in a single day, as the company warned that the conflict between Israel and Hamas, coupled with higher fuel costs, would affect its profits.
Performance of the four major U.S. stock indexes on Wednesday (19th): Almost all 11 major sectors of the S&P 500 Index fell, with only energy and consumer staples stocks recording gains. (Photo: Finviz) Focus Stocks
The five kings of science and technology all fell. apple (AAPL-US) fell 0.74%; Meta Platforms (META-US) fell 2.17%; Alphabet (GOOGL-US) fell 1.26%; Amazon (AMZN-US) fell 2.54%; Microsoft (MSFT-US) fell 0.59%.
Dow JonesComponent stocks closed mostly in the black. Walgreens Boots Alliance(WBA-US) fell 7.00%; Kaifeng Heavy Industry (CAT-US) fell 4.93%; Goldman Sachs (GS-US) fell 2.39%; Salesforce(CRM-US) fell 2.39%; 3M (MMM-US) fell 2.37%; Baoqiao (PG-US) rose 2.58%; McDonald’s (MCD-US) rose 1.95%.
half feeOnly Broadcom and Micron reported gains. Asmore (ASML-US) fell 4.17%; Huida (NVDA-US) fell 3.96%; Marvel (MRVL-US) fell 3.20%; AMD (AMD-US) fell 2.82%; Intel (INTC-US) fell 1.16%; Qualcomm (QCOM-US) fell 1.09%; Broadcom (AVGO-US) rose 0.30%; Micron (MU-US) rose 0.20%.
Taiwan stock ADR is dominated by UMC. TSMC ADR(TSM-US) fell 1.54%; ASE ADR(ASX-US) fell 0.77%; UMC ADR(UMC-US) rose 0.82%; Chunghwa Telecom ADR(CHT-US) fell 0.99%.
Corporate News
United Airlines (UAL-US) closed down 9.67% on Wednesday, with the stock price falling to a one-year low. The company warned that rising jet fuel prices, coupled with the suspension of flights to and from Tel Aviv due to the conflict between Israel and Hamas, will erode profits in the final quarter of this year. It forecast adjusted earnings per share (EPS) this quarter will fall between 1.50 and 1.50. Between $1.80 and $2.06, analysts predicted.
J.B Hunt(JBHT-US) closed down 8.85%. Due to the decline in transportation demand caused by customers’ destocking, the transportation service provider recently announced that its last quarter profit dropped by 30% compared with the same period last year, and its revenue also fell by nearly 18%.
Consumer products giant Baoqiao (PG-US) closed up 2.58%. As price increases helped offset the impact of declining sales, Baoqiao’s sales grew by about 6% last quarter, and earnings per share were US$1.83, both better than expected, and it raised its outlook for the 2024 fiscal year.
Morgan Stanley (MS-US) fell 6.78%, the largest single-day decline since June 2020. Morgan Stanley’s performance last quarter was bleak, mainly due to the sluggish performance of its investment banking business and a sharp decline in capital flows in its wealth management unit.
Other large bank stocks fell in tandem, but not as much as Morgan Stanley. Goldman Sachs (GS-US) fell nearly 2.4%, closing at its lowest price in more than a year, with JPMorgan Chase (JPM-US) and Bank of America both fell 1.1%. Compared with other peers, Morgan Stanley’s investment banking business performed slightly worse.
Economic data: U.S. building permits decreased by 4.4% month-on-month in September, expected to be -5.9%, and the previous value was -6.8%. U.S. building permits in September reported 1.47 million units, compared with 1.45 million expected, and the previous value was 1.54 million units. New housing starts in the U.S. increased by 7% month-on-month in September. %, expected 8.5%, previous value – 12.5% U.S. housing starts in September reported 1.36 million units, expected 1.37 million units, previous value 1.27 million units Wall Street analysis
Jane Foley, head of foreign exchange strategy at Rabobank, said the latest reports of hospital bombings have raised the risk of escalation in the Middle East. She said that while there were no signs of panic, if the situation escalated significantly, we might see an increase in risk aversion.
“We just don’t know how long inflation will remain at high levels, which in turn raises questions about the longevity of high interest rates,” said Fawad Razaqzada, market analyst at City Index and Forex.com. “Judging from recent U.S. economic data, oil prices and Fed Judging from the speech, it may take a long time for the Fed to start cutting interest rates.”
“Many investors are concerned about whether an unexpected uptick in the economy will lead to further tightening from the Fed,” said Evercore’s Krishna Guha. “However, we think Ball will stick to Vice Chairman Philip Jefferson’s message that ‘data continues to be strong'” , but yields have also fluctuated significantly, leading to a tightening of financial conditions.” The Fed can adopt a wait-and-see attitude and be in no rush to make a policy response in November.”
Kevin Gordon, senior investment strategist at Charles Schwab, said the market focus is turning to revenue growth during the earnings season, with investors trying to understand which companies are experiencing increased demand and which companies are only increasing profits through cost cutting.
“We’re at a stage in the cycle where companies really need to start showing real demand recovery, and if that doesn’t happen, stock prices may not get the boost that people expect,” he said.
The figures are all updated before the deadline, please refer to the actual quotation.
2023-10-18 21:28:08
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