Although the latest November US Personal Consumption Expenditure (PCE) Price Index showed a further cooling in inflation, it still was not enough to stop the Federal Reserve (Fed) from raising interest rates next year. ).
before the deadline,Dow Jones Industrial Averagefell nearly 150 points or nearly 0.5%,Nasdaq Composite Indexfell more than 80 points or nearly 0.8%,S&P 500 indexfell nearly 0.5%,Semiconductor PhiladelphiaThe index fell by more than 1.4%.
According to data released by the US Department of Commerce, the PCE price index rose by 5.5% in November, in line with market expectations, lower than the previous revised value of 6.3%, slowing for the fifth consecutive month, but there is still a distance from the Fed’s target and The Fed’s favorite inflation gauge, the core PCE price index rose 4.7% in November, slightly higher than 4.6% expected by the market, but has dropped significantly from the previous value of 5%.
On a month-on-month basis, the PCE price index rose by 0.1% in November, in line with market expectations, well below its previous revised value of 0.4%; the core PCE price index in November increased by 0.2%, in line with market expectations, slightly lower than the previous revised value of 0.3%.
While the data showed further easing in US inflation, recent data also showed that consumers’ inflation expectations for next year eased in December, reinforcing the view that price pressures have reached peak in previous months and highlighting the effectiveness of the Fed’s interest rate hike measures Cooling prices and demand, but still far from target, the Fed will continue to tighten monetary policy going forward, while another data showed that consumer spending has stagnated.
US personal spending fell 0.1% in November, below market expectations of 0.2% growth, the previous value was revised to 0.9% from 0.8% and personal income it grew 0.4% in November, higher than market expectations of 0.3%, but lower than the previous value of 0.7%. Inflation-adjusted real personal spending came in at 0% in November, a seven-month low, lower than the 0.1% expected.
Before expiration, according to the CME FedWatch Tool, the US federal funds rate futures market estimated the probability of raising interest rates by 1 yard (25 basis points) in February next year was 65.9%, and the probability of raising interest rates by 2 yards (50 basis points) The probability is 34.1%, and the terminal rate is between 4.75% and 5%.
In addition, the Ministry of Commerce also announced on the same day that the initial value of the monthly growth rate of durable goods orders in November unexpectedly dropped by 2.1%, which was far lower than the decline of 0.1 % expected by the market. the lowest value since February this year after three consecutive months of growth. The value was revised downwards from 1.1% to 0.7%, while the initial value of the monthly growth rate of goods orders core durables, excluding defense, decreased 2.6%.
Starting at 22:00 on Thursday (23rd) Taipei time:
Focus on actions:
Tesla (ATS-US) fell 2.15% in early trading to $122.59 a share
Tesla CEO Musk said he will not sell more Tesla shares in the next 18 to 24 months. Musk has sold about $39 billion worth of Tesla stock in the past year, including his $44 billion takeover of Twitter. Shares of Tesla rose about 1.2% in premarket trading.
Metaplatforms(META-USA) fell 0.32% to $116.74 a share in early trading
Facebook’s parent company, Meta Platforms, has agreed to pay $725 million to settle a class-action lawsuit alleging Facebook gave third parties such as Cambridge Analytica access to users’ personal information. Shares of Meta rose 0.6% in pre-market trading.
Biogene(BIIB-USA) fell 1.30% in early trading to $276.95 per share
Biogen’s Japanese partner Eisai confirmed to Reuters a third death in a trial of lecanemab, the two companies’ investigational Alzheimer’s drug, and said it was investigating the cause of death. The news impacted Biogen’s pre-market share price which fell more than 2%.
Today’s key economic data:
- Revised Monthly Rate of US Building Permits in November was -10.6%, previously -11.2%
- The total annualized number of building permits in the United States in November was revised to 1.351 million units, from the previous value of 1.342 million units
- Monthly US personal spending rate in November was reported at 0.1%, expected at 0.2% and was 0.9% previously
- US Personal Income Monthly Rate in November was restored at 0.4%, expected at 0.3% and previous value of 0.7%
- US November PCE Price Index Reported 5.5% Annual Rate, 5.6% Expected, 6.1% Previous Value
- US November PCE Price Index was 0.1%, 0.2% expected and prior value was 0.3%
- November US PCE Core Price Index reported 4.7% annual rate, 4.7% expected and 5% prior value
- US PCE Core Price Index posted a monthly rate of 0.2% in November, expected at 0.2% and prior value at 0.3%
- US Starting Monthly Durable Goods Orders Rate in November reported -2.1%, -0.6% expected and 0.7% prior
- US Consumer Confidence Index final in December was 59.7, expected 59.1 and prior value was 59.1
Wall Street Analysis:
Michael Hartnett, a senior investment strategist at Bank of America, is optimistic about the performance of bonds in the first half of next year, expecting the economic downturn to last for the first 6-9 months of next year and not be too severe or traumatic. Stocks will slowly edge higher in the second half of the year once it becomes clear that peak interest rates have passed and corporate profits have bottomed out, he said.
Hartnett also said that once investors start anticipating an economic recovery, the outlook for small-caps is “really good,” adding that “we’re not going back to a world of zero interest rates or quantitative easing, where they just own big tech stocks and you’re good to go.” , investors are looking for new leaders in the market, which will include small caps.”
