Even though the number of small non-agricultural employment in September was better than expected, concerns about factors such as increased inflation and debt ceiling stalemate continued to suppress risk sentiment. US stocks all opened lower on Tuesday (5th). Before the deadline, the Dow Jones Industrial Average fell 200 points or 0.6%, the Nasdaq Composite Index fell 0.5%, the S&P 500 Index fell 0.4%, and fees fell 0.3%.
One of the reasons for market concerns is inflation. The recent surge in energy prices has triggered market concerns about rising costs for consumers and businesses. Although European natural gas prices have continued to rise, oil prices have fallen from a seven-year high on Wednesday.
Affected by concerns about rising fuel costs and slowing economic growth, aviation stocks opened lower, led by American Airlines (AAL-US) and JetBlue Airways (JBLU-US).
The recent sell-off of US Treasury bonds continued on Wednesday. The yields of 10-year and 30-year US Treasury bonds once hit their highest since June, and their gains stopped before the deadline, almost unchanged from the previous trading day.
Technology stocks sensitive to interest rate movements plunged again. Large technology stocks such as Apple (AAPL-US), Facebook (FB-US), Amazon (AMZN-US) and Alphabet (GOOGL-US) all dropped more than 1% at the opening.
In addition to inflation, the market continues to pay attention to the issue of debt ceilings. US Treasury Secretary Janet Yellen warned on Tuesday that if Congress fails to resolve its disagreements over the debt ceiling by October 18, the United States may face an economic recession.
In economic news, the United States announced that the “small non-agricultural” ADP created 568,000 new jobs in September, higher than market expectations, and 340,000 in August, showing steady employment growth. ADP economists said that as the epidemic continues to improve, companies are expected to eliminate bottlenecks in human recruitment.
As of 21 o’clock on Wednesday (6th) Taipei time:
- The Dow Jones Industrial Average fell 200.81 points or -0.59%, temporarily reporting 34,113.86 points
- The Nasdaq Composite Index fell 67.83 points, or -0.47%, to 1,4366.00 points temporarily
- The S&P 500 Index fell by 20.10 points, or -0.46%, temporarily at 4,325.62
- Fees and a half fell 9.16 points, or -0.28%, to 3,218.09 points temporarily
- TSMC’s ADR fell 0.66% to US$108.54 per share
- The 10-year U.S. Treasury yield fell to 1.522%
- New York Light Crude Oil fell 0.92% to US$78.20 per barrel
- Brent crude oil fell 0.88% to US$81.83 per barrel
- Gold fell 0.20% to US$1,57.40 per ounce
- The dollar index rose to 94.28
Focus stocks:
Palantir (PLTR-US) rose 6.07% in early trading to $24.62.
Big data company Palantir announced Tuesday that it has won a $823 million contract from the U.S. military to set up the Gotham platform for the U.S. Army and provide data analysis software related to military intelligence projects.
Modena (MRNA-US) fell 3.67% in early trading to $319.93.
Due to the increased risk of myocarditis side effects among young people, the Swedish health agency said on Wednesday that it would suspend the administration of Modena’s new crown vaccine to people born after 1991.
American Airlines (AAL-US) fell 2.33% in early trading to US$20.97.
With the soaring oil prices, Goldman Sachs analysts believe that the profits of the aviation industry may be eroded by high energy costs. In addition, considering the relatively high operating leverage of American Airlines, they have rated their stocks under “neutral.” Repair to “sell”.
Today’s key economic data:
- The US September ADP small non-agricultural employment report was 568,000, which is expected to be 430,000. The previous value was revised down from 374,000 to 340,000.
- 22:30 Taipei time announced the increase and decrease of EIA crude oil inventories last week, the previous value was 4.578 million
Wall Street analysis:
Erin Browne, PIMCO’s multi-asset portfolio manager, believes that inflation risks have indeed begun to penetrate and may erode corporate profitability from the fourth quarter. He also said that the market underestimated the risks posed by the European energy crisis.
Simeon Hyman, director of investment strategy at ProShares Advisors, said that although energy prices continue to rise and product shortages will bring some inflation, he believes that economic activity is likely to remain strong and unlikely to shrink.
