Asian stocks and European stocks rebounded, which also drove the main indexes of US stocks to rise in early trading on Friday (20th). The Dow rose 0.66%, the S&P 500 gained 0.99%, the Nasdaq gained 1.37% and the S&P 500 gained 0.8%.
China slashed its 5-year LPR on Friday, signaling a stabilizing property market and economy, boosting investor sentiment. Among them, the 5-year LPR cut interest rates by 15 basis points, the first time in four months. Driven by the Chinese stock market, sentiment in Asian and European stocks generally turned warmer.
Investors have fled almost all major asset classes in the past week, with only U.S. stocks and U.S. Treasuries not experiencing large-scale capital outflows amid fears that tightening monetary policy will lead to a recession in major global economies. Stock funds outflowed $5.2 billion in the week to May 18, although U.S. stocks attracted $300 million in inflows, according to Bank of America and EPFR Global data.
Meanwhile, the Fed has signaled it will continue to raise interest rates in an attempt to moderate the recent inflation spike. Earlier this week, Fed Chairman Powell said he would not hesitate to raise interest rates, even above neutral.
Wall Street’s losses ahead of Friday were partly driven by poor earnings reports from major retailers such as Walmart and Target, which raised concerns about a weakening consumer spending power and a lack of business responses to high inflation.
As of Friday 21:00 Taipei time:
- The Dow Jones Industrial Average rose 205.89 points, 0.66%, and temporarily reported 31459.02 points
- Nasdaq rose 156.05 or 1.37% to temporarily report 11544.54 points
- The S&P 500 rose 38.58 points, or 0.99%, to 3939.37
- Feihan rose 23.38 points or 0.8%, temporarily reported 2931.34 points
- TSMC ADR rose 1.68% to $91.75 per share
- 10-year U.S. Treasury yield at 2.84%
- NY Light crude rose 0.12% to $112.35 a barrel
- Brent crude rose 0.21% to $112.28 a barrel
- Gold rose 0.2% to $1,850.70 an ounce
- The dollar index rose 0.23% to 102.98
Stocks in focus:
Twitter (TWTR-US) rose 1.56% to $37.86
Musk this week suspended the $44 billion acquisition deal, citing a fake Twitter account, and raised the possibility of renegotiation, sparking speculation that the deal was broken.
However, Twitter’s general counsel and policy director Vijaya Gadde told staff at a company meeting that there was no trading suspension, refuting Musk’s earlier claims, according to people who attended the meeting.
Tesla (TSLA-US) rose 0.08% to $710.04
U.S. electric car maker Tesla plans to continue closed-loop management at its Shanghai plant until mid-June, according to people familiar with the matter, as the Shanghai government eases lockdown measures.
Now Tesla wants employees to move into dormitories and continue closed-loop management until June 13, the sources said. Tesla also plans to start a second shift as soon as next week so that it can resume round-the-clock production when the supply of auto parts becomes smoother.
Apple (AAPL-US) rose 0.6% to $138.19
Apple executives showed the upcoming mixed-reality headset to the company’s board last week, according to people familiar with the matter, signaling that development of the device has entered a critical stage.
The company’s board, which includes eight independent directors and Apple CEO Tim Cook, meets at least four times a year. A version of the device was demoed at a recent board meeting, the people said.
In recent weeks, Apple has also accelerated development of rOS, the software that runs the headset, according to people familiar with the matter.
Daily key economic data:
Wall Street Analysis:
Bill Stone, chief information officer of Glenview Trust, believes that the current round of U.S. stock sell-offs is certainly caused by a number of factors, but the direct cause of the recent decline comes from concerns about U.S. consumers. Retailers are struggling with excess inventory, and cost pressures from high inflation have hit their bottom line.
Goldman Sachs chief U.S. equity strategist David Kostin pointed out that the U.S. economy is not necessarily heading for a recession, but it needs to be prepared first. There is a 35% chance that the U.S. economy will enter a recession within the next two years, and once a recession occurs, the median peak-to-trough decline in the S&P 500 is 24%. Energy, consumer staples, healthcare and utilities, on average, outperformed the broader index.
Lindsey Bell, chief market and currency strategist at Ally Invest, believes that the recent pullback in U.S. stocks further shows that the market is still looking for direction, and there is still a lot of uncertainty about what’s next, especially what the Fed will do and how it will be done. Transform future growth.