The main US stock indexes opened higher on Thursday (14th), a day after the US Federal Reserve (Fed) indicated it would end its recent aggressive interest rate hikes and hinted at at least three interest rate cut next year.
As of press time, the Dow Jones Industrial Average rose nearly 40 points or nearly 0.1%, the Nasdaq Composite Index rose more than 90 points or nearly 0.6%, the S&P 500 Index rose nearly 0.5%, and the Philadelphia Semiconductor Index rose more than 2%.
US stocks are expected to continue their gains after the dovish signal from the Fed sent a bullish signal to the market, and the outside world is optimistic that inflationary pressures are easing. On the other hand, the euro maintained its earlier gains after the European Central Bank (ECB) kept interest rates unchanged as expected.
As for economic data, the latest data released by the United States on Thursday showed that the number of initial jobless benefit claims fell to 202,000 last week, below economists’ expectations, and the number of benefits fell continued unemployment to 1.876 million, also lower than expected, highlighting the Still robust job market. In addition, US retail sales increased 0.3% in November, well above the previous value and market expectations of -0.1%, and the growth rate turned from negative to positive again.
At the last monetary policy meeting of the year, the Fed announced that it would keep interest rates unchanged. At the same time, it lowered its forecasts for next year’s economy, general inflation, and interest rates in its quarterly economic outlook. the job market would remain stable. The Chairman of Fed, Jerome Powell, said in a press conference that interest rates are close to their peak and that discussions on easing monetary policy have begun. It is worth noting that the Fed dot plot shows that it will cut interest rates three times next year, one more than in September.
As the Fed signaled a policy change, the bank managed rising inflation without causing a recession or causing significant damage to the job market. In addition, Ball’s lack of resistance to growing investor expectations for a rate cut next year triggered a surge in US Treasury prices and pushed the Dow Jones Industrial Average to a record high.
Jefferies analyst W. Brad Bechtel said: “The Fed’s policy change is officially out and the market continues to digest the news. The dot plot suggests a 3-digit rate cut (75 basis points ), while the market is currently indicating a rate cut of around 140 basis points. So the two still need to coordinate, but Ball had the opportunity to undercut the market prices, but he certainly didn’t take any steps.”
Foreign media surveys show that investors expect the S&P 500 index to rise to around 4,835 points by the end of next year, an increase from the last survey before the Fed made its decision. But the gains, about 3% from current levels, reflect investor skepticism about how much US stocks can rebound after rising more than 20% this year.
From 22:00 Taipei time on Thursday (14th): Stocks in focus:
Shares of Tesla ( TSLA-US ) rose 1.97% in early trading to $244.00 a share
According to electric vehicle website Electrek, Tesla reached a cooperation agreement with Uber (UBER-US) on Wednesday to provide Uber drivers with electric vehicles at a discounted price, which can save up to $3,000. This alliance will support Uber’s ongoing commitment to vehicle electrification.
Shares of Amazon ( AMZN-US ) rose 0.37% in early trading to $149.39 a share
Europe’s top court ruled on Thursday (14th) that Amazon does not need to pay 250 million euros ($273 million) in back taxes to Luxembourg, meaning EU Antitrust Commissioner Margrethe Vestager’s action against multinational companies has been announced in fail The decision of the Court of Justice of the European Union is final.
Shares of Adobe ( ADBE-US ) fell 6.71% in early trading to $582.40 a share
Creative software company Adobe recently released a lower-than-expected financial forecast for 2024, and its stock price fell nearly 4% before the market opened on Thursday. The company predicts next year’s revenue will be between US$21.3 billion and US$21.5 billion, below Wall Street analysts’ expectations of US$21.73 billion; adjusted earnings per share are expected to be between US$17.60 and US$18, below analysts’ expectations. $18.
Today’s key economic data:
- The US import price index in November reported a monthly rate of -0.4%, expected -0.8%, and the previous value -0.6%
- The US export price index in November was -0.9% monthly, expected -1.0%, and the previous value -0.9%
- US core retail sales in November reported a monthly rate of 0.2%, expected -0.1%, and a previous value of 0.1%
- US retail sales in November reported a monthly rate of 0.3%, expected – 0.1%, and previous value – 0.2%
- The number of people who claimed unemployment benefits in the US last week was 202,000, compared to the expected 220,000, and the previous figure of 221,000
- The number of people still receiving unemployment benefits in the United States last week was 187.6, 1.887 million were expected, and the previous value was 1.856 million
Wall Street Analysis:
As the Fed signals a policy shift, some major players in the bond community are divided about how high US debt can go. Jeffrey Gundlach of DoubleLine Capital believes the 10-year US Treasury yield will fall to the low end of the 3% range, and the Fed may lower the cash rate target by a full two percentage points next year.
Former bond king Bill Gross dismissed the optimism, saying yields are close to where they should be at 4%. Gross, who once managed Pimco, the world’s largest bond fund, posted on the social media platform”.
#Stocks #Morning #Trading #Fed #interest #rate #cut #signal #prompts #major #market #indexes #open #higher #Anue #JuhengUSA #Stock #Radar
