OPEC+’s surprise plan to cut oil output revived fears of rising inflation and prompted traders to trim bets on a dovish Fed. Major U.S. stock indexes fell in early trading on Monday (3rd),Dow Jones Indexdown 0.09%,S&P 500 Indexdown 0.17%,NasdaqThe index fell 0.62%,fee halfThe index rose 0.64%.
On the news, OPEC+ decided to cut production by 1.16 million barrels per day, causing oil prices to soar. WTI Crude Oil,Brent Crude OilThe increase was close to 6%.
Optimism fueled by recent market strength has faded as the prospect of higher oil prices fueled fears of rising inflation and a looming recession. The market raised the probability of a 25 basis point rate hike in May to 65% from 55% earlier.
While the collapse of Silicon Valley Bank in March highlighted the turmoil in the banking sector, major U.S. stock indexes were positive in the first quarter. NasdaqThe index led the way with a 16.8 percent gain,S&P 500 IndexIt rose 7% in the first three months of the year. DowIt lagged behind, but still managed to gain 0.4%.
“At least for now, tech is seen as a safe haven from all things banking news,” Wellington Shields technical analyst Frank Gretz said in a note to clients.
As of 21:00 on Monday, Taipei time:
- Dow Jones IndexDown 28.37 points or 0.09%, temporarily at 33245.78 points
- NasdaqDown 75.81 points or 0.62%, tentatively at 12146.09 points
- The S&P 500 fell 7.11 points, or 0.17%, to 4102.20 points temporarily
- fee halfUp 8.67 points or 0.27%, tentatively at 3216.93 points
- TSMC ADR up 0.39% to $93.38 per share
- 10-Year U.S. Treasury YieldUp 4 basis points to 3.51%
- New York light crude rose 5.89% to $80.13 a barrel
- Brent Crude OilUp 5.87% to $84.58 a barrel
- goldUp 0.4% to $1,994.10 an ounce
- dollar indexdown 0.11% to 102.39
Focus stocks:
Lockheed Martin (LMT-US) rose 0.1 percent to $473.0
Lockheed Martin said on Monday (3rd) that the U.S. Army has agreed to give the company a multi-year production contract for the Joint Air-to-Ground Missile (JAGM) and Hellfire missiles. The deal could be as high as $4.5 billion, including subsequent renewals.
The contract, worth $439 million in its first year, is one of the first multi-year precision munitions contracts as the Pentagon looks to build up a stockpile to deter China.
McDonald’s (MCD-US) rose 0.22 percent to $280.29
The Wall Street Journal reported on Sunday (2nd) that burger chain McDonald’s is temporarily closing its U.S. offices this week as it prepares to notify employees of layoffs as part of a sweeping restructuring of the company.
The report pointed out that in an internal email sent to US employees and some international employees last week, McDonald’s asked them to work from home from Monday (3rd) to Wednesday (5th) in order to make personnel decisions virtually. It is unclear how many jobs will be cut.
“During the week of April 3, we will be communicating key decisions related to roles and staffing levels across the organization,” the report quoted the email as saying.
Daily key economic data:
none
Wall Street Analysis:
Paul Gambles, co-founder and managing partner of MBMG Group, believes that we may now be entering a very short-term decline again. The previous year’s policy guidance was so irresponsible, and all the damage they’ve done is now starting to show.
Michael Wilson, chief U.S. stock strategist at Morgan Stanley, warned that the more than 20% rise in technology stocks may not be sustainable, and the industry will return to its low point.
Wilson pointed out that tech has traditionally been viewed as a defensive industry, but he disagreed. Technology stocks are actually pro-cyclical, bottoming at the same time as the broader market in a bear market.
