US stocks opened higher on Wednesday (21st) as the market waited for the Federal Reserve (Fed) to announce the latest interest rate decision and dot plot chart. Through the chart, we could see the Fed’s policy makers’ expectations for the period of future financial tightening and interest rate increases.
Before the deadline, the Dow Jones Industrial Average rose more than 200 points or 0.73%, the Nasdaq Composite rose more than 50 points or 0.48%, the S&P 500 rose almost 0.7%, and the Philadelphia Semiconductor Index rose more than 1% .
The Fed will announce its interest rate decision at 2:00 Taiwan time on Thursday (22nd) The market generally expects interest rates to rise by another 3 yards (75 basis points), but is not ruling out a rate hike of 4 yards. (100 basis points).
In addition to the interest rate decision, the Fed’s dot plot has also attracted the market’s attention. The dot plot reflects Fed policymakers’ expectations for the path of future interest rate rises, and when or to what extent the they will raise interest rates. Fed Chairman Powell will also hold a press conference after the announcement of the latest interest rate decision, and his comments at that time may also have a major impact on the market.
Some market analysts pointed out that historical experience shows that after the Fed announces its interest rate decision, US stocks may experience a wave of relief and rebound.In the past 6 days, the S&P 500 index fell and the Nasdaq 100 index 6.2% and 7% respectively. .
In terms of geopolitics, Russian President Vladimir Putin made a statement earlier this morning, announcing the mobilization of reserve troops. At the same time, the Russian Defense Minister said that Russia will recruit 300,000 reservists in the process of implementing a partial mobilization order.
Putin said the main goal of the special military operation was to “liberate the entire Donbas”. He also accused the West of having “crossed all borders”, warning those who carried out “nuclear blackmail” against Russia that “the wind could turn in their direction”, adding that “if there is a threat to Russia’s territorial integrity , we will use it all. the way. This is not a cliff.”
The US dollar strengthened due to Putin’s comments, while the euro weakened The US dollar index rose to 110.42 at the time of writing At the same time, international oil prices rose. West Texas crude oil futures due in November rose 2.28% to US $92.69 a barrel West Texas crude futures settled up 2.14% to $85.77 a barrel. The 10-year US Treasury yield fell 4 basis points to 3.53 percent.
In other news, the German government announced the nationalization of Uniper, the country’s largest natural gas supplier, in order to avoid an energy crisis.
From 21:00 on Wednesday (21st) Taipei time:
General Mills (GIS-US) rose 3.63% to $78.15 a share in early trade
Cheerios cereal maker General Mills raised its full-year sales and profit forecasts on Wednesday, citing higher prices and strong demand for its breakfast cereal, snacks and pet food. The company anticipates organic growth between 6% and 7% for fiscal 2023, compared to a previous estimate of 4% to 5%.
Stitch Fix (SFIX-US) fell 5.31% to $4.47 a share in early trade
Shares of online shopping and styling services company Stitch Fix fell more than 10 percent in premarket trading after previously reporting weaker-than-expected fourth-quarter results and a cut in its first-quarter forecast. The company lost $0.89 per share in the fourth quarter, missing analysts’ estimates of a loss of $0.63 per share; revenue of $481.9 million was in line with expectations of $487.4 million.
Canaccord Genuity downgraded the stock to “Hold” from “Buy,” citing a difficult macroeconomic environment complicating the company’s efforts to turn around operations.
Beyond Meat ( BYND-US ) rose 0.53% to $16.11 a share in early trade
Beyond Meat chief operating officer Doug Ramsey was suspended yesterday (20th) after he was arrested on Saturday (17th) for allegedly biting off a rival’s nose during an argument. Beyond Meat said its chief operating officer will be temporarily replaced by Jonathan Nelson, senior vice president of manufacturing operations. After the news broke, Beyond Meat’s stock price fell 6% on the day, and continued to decline pre-market on Wednesday, but then rose 1.37% to temporarily trade at $16.25 per share.
Today’s key economic data:
- The annual total of existing home sales in the United States in August is expected to be 4.7 million units, compared to the previous value of 4.81 million units.
- August US current home sales annualized monthly rate expected – 2.3%, previous value – 5.9%
- United States last week (as of 9/16) EIA crude oil inventory changes are expected to 2.161 million barrels, previous value of 2.442 million barrels
- US last week (as of 9/16) EIA gasoline inventory change expected – 431,000 barrels, previous value – 1.767 million barrels
Wall Street Analysis:
Danni Hewson, financial analyst at AJ Bell, said investors were anticipating too much about the Fed’s next move, and the Fed’s decision should bring them some comfort. If the Fed raises rates another 3 yds, as originally planned, the market could bounce back, in part by dispelling investor concerns about a 4 yds rate hike.
Victoria Scholar, head of investment at Interactive Investor, said traders who were short positions in anticipation of tonight’s Fed announcement are closing their positions today to avoid any risk of an event.
Ales Koutny, portfolio manager at Janus Henderson Investors, said that the escalation of the Russian-Ukrainian conflict will affect global markets, deepening the energy and food crises, while also weighing on risk assets, but the dollar will continues to benefit because the US is geographically independent And because of its economic makeup, the US is more resilient.