After US consumer price index (CPI) growth in October was lower than expected, the producer price index (PPI) also came off the good news of cooling inflation in October, rising market expectations that the Federal Reserve (Fed) will escalate to a small rate hike As expected, major US stock indexes opened higher on Tuesday (15).
before the deadline,Dow Jones Industrial Averagerose more than 300 points or nearly 1%,Nasdaq Composite Indexrose more than 230 points or nearly 2.1%,S&P 500 indexnearly 1.4%,Semiconductor PhiladelphiaThe index rose nearly 3.3%.
October PPI rose 8% year over year, lower than market expectations of 8.3%, and also fell sharply from a revised 8.4%, according to data released on Tuesday from the United States.
Excluding food and energy volatility, US core PPI rose 6.7% in October, down from 7.2% the previous month, and also below market expectations of 7.2%; the monthly growth rate of PPI in October fell to 0%, lower than the previous month The monthly level of 0.2% and the expected value of 0.3%.
After the release of the data, pre-market US stocks dominated by technology stocksNasdaq Futures on 100 indices are up 3%,S&P 500 indexFutures also rose sharply, while the US 10-year Treasury bill yieldfell to 3.788%,dollar indexIt also fell to 105.70.
Two consecutive data shows that US inflation is cooling and market risk appetite is improving. The Fed is estimated to cut rate hike to 2 yards at December meeting after raising interest rates 3 yards (75 basis points) four consecutive times (50 basis points). Even Fed Vice Chair Brainard (Lael Brainard) recently said that it may soon be appropriate to slow the pace of interest rate hikes.
In addition to the good news brought by PPI, good earnings reports from US retailers also boosted market sentiment. Walmart (WMT-USA) Last quarter’s performance beat expectations, with revenue of $152.8 billion, better than analyst expectations of $147.516 billion; adjusted earnings per share were reported at $1.5, better than analyst expectations of $1.32. In addition, Wal-Mart also announced a new $20 billion stock repurchase plan. Shares of Wal-Mart rose 7.02% in early trading, indicatively at $148.11 a share.
Starting at 22:00 on Tuesday (15) Taipei time:
Focus on actions:
TSMC ADR(TSM-USA) rose 11.78% to $81.38 a share in early trading
The latest filings show Berkshire Hathaway, a Warren Buffett subsidiary, spent more than $4.1 billion in the third quarter to buy TSMC (2330-TW) worth more than $4.1 billion, the news sent TSMC’s US equity ADR up more than 12% ahead of the market. In addition, hedge fund Tiger Global has also decided to buy TSMC.
The home depot (HD-USA) up 1.9% in early trading to $312.74 per share
Home Depot’s performance in the recent quarter was outstanding, with revenue up 6% to $38.9 billion and earnings per share of $4.24, both better than analyst expectations of $37.96 billion and $ 4.12, but still stood by their financial forecast and reiterated Fiscal 2022 sales growth of around 3%.
Tencent Music (TME-US) rose 16.18 percent to $5.17 a share in early trading
Tencent Music’s revenue and earnings in the recent quarter were better than Wall Street analysts’ expectations. The pre-market share price rose nearly 10% on the back of the good news. The company’s stellar performance in the recent quarter was largely driven by an increase in paying subscribers.
Today’s key economic data:
- US October PPI Annual Growth Rate Reported 8%, 8.3% Expected, Previous Value 8.4%
- US October Monthly PPI Growth Rate Reported 0.2%, Expected 0.4%, Previous Value 0.2%
- October US Core PPI Annual Growth Rate 6.7%, 7.2% Expected, Previous Value Was 7.2%
- US October Core PPI Monthly Growth Rate Reported 0%, Expected 0.3%, Previous Value 0.2%
Wall Street Analysis:
Goldman Sachs strategists believe the rally in US equities, fueled by a rise in risk appetite, “may have been exaggerated” after the S&P 500 rose about 15% from its recent lows.
The growth rate of the US consumer price index (CPI) was weaker than expected in October, triggering a surge in risky assets, while US dollar and US bond yields fell sharply, but Goldman Sachs strategists recalled that a strong rebound is not uncommon in a bear market, and extremely bearish positions It is also “likely to have magnified this trend.”
JPMorgan’s chief global market strategist is advising clients to use the ongoing rebound in US equities to reduce exposure as recession risks remain “high”.
While US reports last month showed a slowdown in inflation, raising the chances of a soft landing, strategists at JPMorgan see a recession hard to avoid with the federal funds rate approaching 5%. Unless the Fed commits to a “more significant turnaround,” the chances of a soft landing will increase.
