The main inflation indicators showed signs of moderation, which slightly eased investors’ concerns about rising interest rates. US stocks were mixed on Friday (26th). The Dow Jones Industrial Average dropped 11 points or 0.05% at the opening. Technology stocks rebounded. The Nasdaq Index rose 1.1%, and the S&P 500 Index rose 0.4%, costing half Up 1.5%.
U.S. Treasury yields and major indexes both fell, and the US dollar rebounded from a few weeks low. As traders continue to set economic growth and inflation expectations, the bond market has largely affected the stock market this week. The Nasdaq recorded its biggest one-day drop since the end of October on Thursday.
Technology stocks almost set their worst performance in months this week. After several days of selling, Apple (AAPL-US), Amazon (AMZN-US), Microsoft (MSFT-US) and Alphabet (GOOGL-US) all opened on Friday. Rose more than 1%.
In terms of economic data, after receiving a cash bailout check, the United States recorded the largest increase in personal income in nine months in January, with a monthly increase of 10%. Personal spending increased by 2.4% on a month, much higher than the revised value of -0.4%.
The Fed’s preferred inflation indicator core PCE increased by 0.3% monthly, slightly higher than the expected 0.2% and unchanged from the previous value. The annual increase was 1.5%, better than the expected 1.3% and the previous value of 1.4%.
After the sharp increase in personal income, investors continued to pay attention to the progress of the US$1.9 trillion bailout case. The House of Representatives is expected to approve Biden’s $1.9 trillion stimulus plan later on Friday (26th) and send it to Biden for signature before March 14.
As of 22 o’clock on Friday (26th) Taipei time:
- The Dow Jones Index fell 16.32 points, or -0.05%, to 31385.69 points temporarily
- Nasdaq rose by 142.47 points or-1.09%, temporarily reporting 13261.91 points
- The S&P 500 Index rose 16.84 points, or 0.44%, to 3,846.18 points temporarily
- Fees and a half rose by 45.92 points or 1.53%, temporarily reported at 3045.08 points
- TSMC’s ADR fell 0.36% to $125.55 per share
- The 10-year U.S. Treasury yield fell to 1.463%
- New York Light Crude Oil fell 1.39% to US$62.65 per barrel
- Brent crude oil fell 1.27% to US$66.03 per barrel
- Gold fell 0.88% to $1,759.70 per ounce
- The U.S. dollar index rose 0.46% to 90.55 points
Salesforce (CRM-US) fell 1.12% in early trading to $228.50.
Salesforce announced the fiscal year 2021 Q4 financial report. Revenue increased by 20% annually to 5.82 billion U.S. dollars. Adjusted EPS was reported at 1.04 U.S. dollars, which were better than analysts’ expectations. However, its EPS for the next fiscal year was slightly lower than analyst expectations.
Beyond Meat (BYND-US) rose 10.69% in early trading to $159.11.
Beyond Meat announced on Thursday that it has reached a cooperation agreement with McDonald’s Corp. and Yum! Brands Inc., becoming McDonald’s premier supplier of vegan burgers, as well as being a subsidiary of Yum! Hut) and Taco Bell produce plant-based protein products.
Foot Locker (FL-US) fell 8.08% in early trading to $48.47.
Foot Locker announced that Q4EPS (non-GAAP) for fiscal year 2020 was reported at $1.55, which was far better than market expectations, but revenue was lower than expected, and same-store sales unexpectedly declined.
Daily key economic data:
- The monthly growth rate of personal spending in the United States reported 2.4% in January, the previous value-0.2%
- The annual growth rate of the PCE index in the United States in January reported 1.5%, compared with the previous value of 1.3%
- In the United States, the core PCE annual growth rate in January was reported at 1.5%, which is expected to be 1.3%. The previous value was lowered from 1.5% to 1.4%
- At 22:45, Taipei time, the US February Chicago PMI will be announced, which is expected to be 61.0 and the previous value is 63.8
- At 23:30, Taipei time, the final value of US consumer confidence in February will be announced, which is expected to be 76.2 and the previous value is 76.2.
Wall Street analysis:
Wei Li, Head of ETF and Index Investment Strategy for Europe, Middle East and Africa at BlackRock, believes that the fundamentals are sound, especially after the vaccine is launched. Once the yield rate stabilizes, risk assets will still perform well.
Dwyfor Evans, head of macro strategy for the Asia-Pacific region at State Street Global in Hong Kong, said that what has happened in recent weeks is that the market has to reprice the Fed’s interest rate hike expectations.
He believes that the rebound in bond yields will have a knock-on effect on corporate loan and mortgage rates, which is also one of the reasons for the pressure on stock prices, because rising yields will have a certain impact on the real economy, and corporate profits may slow down as a result.
Rand Merchant Bank strategist Nema Ramkhelawan-Bhana said that if US bond yields stabilize at the current level, the market will return to calm. She believes that the market has overreacted to concerns about the central bank withdrawing economic support too quickly.