Large U.S. technology companies are about to report earnings. Investors focus on the performance of these companies to understand the impact of inflation and consumer spending on companies. The market is worried about high inflation and slowing global economic growth. U.S. stocks opened lower on Tuesday (26th). , the four indexes fell together. Before the deadline, the Dow Jones Industrial Average fell more than 300 points or nearly 0.9%, the Nasdaq Composite fell 1.45%, the S&P 500 fell nearly 1%, and the Philadelphia Semiconductor Index fell more than 2%.
The results announced by companies before the US stock market opened today gave investors who were bullish on US stocks a sigh of relief. The earnings reports released by parcel freight giants UPS, Gigi and Pepsi all beat analysts’ expectations, followed by Alphabet (a large US technology stock). GOOGL-US) and Microsoft (MSFT-US) will announce their earnings after the market close, which will become the focus of investors’ concern.
The prospect of slowing economic growth and persistently high inflation has led to heightened risk sentiment, including the coronavirus outbreak, supply chain disruptions, Fed tightening, and the Russia-Ukraine war. The trend among U.S. investors looking to cushion their portfolios against the impact of risk is evident, as the relative cost of safe-haven put contracts is at its highest in two years.
Stock markets have been volatile in recent sessions as the coronavirus outbreak in China and the imposition of strict lockdown measures have intensified investor concerns about global economic growth. In addition, soaring inflation has also put pressure on businesses and consumers, and the Fed has also hinted that it will accelerate monetary policy tightening, and the market is worried that it may be a drag on US economic growth.
In terms of international oil prices, it rebounded after experiencing the previous day’s slump, mainly because the market was still worried about Russian supply and Chinese demand. Before the deadline, West Texas crude oil futures stood at the $100 per barrel mark, up 1.52%. , at $100.04 a barrel, while Brent crude futures rose 1.64% to $104 a barrel.
As of 21:00 on Tuesday (26th) Taipei time:
Stocks in focus:
UPS (UPS-US) fell 2.54% to $184.82 a share in early trade
Parcel shipping giant UPS reported a profit of $3.05 per share, beating analysts’ estimates of $2.88, on revenue. Reported 24.4 billion US dollars, also better than market expectations of 23.78 billion US dollars. The company plans to double its share buybacks in 2022, raising the target to $2 billion.
3M (MMM-US) fell 3.16% to $143.91 a share in early trade
Industrial giant 3M’s adjusted earnings per share fell 10% to $2.65 in the last quarter and revenue fell 0.3% to $8.8 billion as the coronavirus pandemic faded and demand for disposable N95 masks fell. In addition, the war in Ukraine has caused the company to face increased costs, and shortages of raw materials and semiconductors have strained production in its auto-manufacturing division.
GE (GE-US) fell 8.01% to $82.68 per share in early trade
Although Gigi’s last quarter reported revenue of $17.04 billion and adjusted earnings of $0.24 per share, both of which were better than market expectations of $16.9 billion and $0.08, the company’s CEO Larry Culp said in a statement that it will respond accordingly. Inflation, supply chain disruptions and other evolving pressures, full-year earnings are expected to be at the low end of the company’s previous forecast. GE previously forecast full-year earnings in the range of $2.8 to $3.5 per share and free cash flow of $5.5 billion to $6.5 billion.
Today’s key economic data:
- The initial monthly growth rate of U.S. durable goods orders in March was 0.8%, expected 1%, the previous value – 1.7%
- The annual growth rate of the S&P/CS20 major city house price index in the United States in February was 20.2%, the expected 19%, and the previous value of 18.9%
- The monthly growth rate of the FHFA house price index in the United States in February was 2.1%, expected to be 1.5%, and the previous value of 1.6%
- The total number of new home sales in the United States is expected to be 765,000 in March, compared with the previous value of 772,000
- The U.S. Conference Board Consumer Confidence Index in April is expected to be 108, the previous value was 107.2
Wall Street Analysis:
Chris Weston, head of research at Pepperstone Financial Pty, said it’s been a big week for U.S. earnings, despite “China being the elephant in the room” (a metaphor for something that, though obvious, is collectively ignored, not discussed, or risk), but performance matters and risk sentiment could strengthen.
The prospect of slowing economic growth and continued high inflation is causing market sentiment to be fragile, said Nancy Davis, chief investment officer at Quadratic Capital Management LLC. The key is the direction of the Fed’s monetary policy, which is a huge unknown.
Carlo Franchini, head of institutional clients at Banca Ifigest, believes it is unrealistic for the U.S. to raise rates in this way without considering the real economy, saying he is also concerned about hawkish signals from the European Central Bank.
