After the U.S. holiday, investor sentiment seems to have improved. U.S. stock futures rebounded before the market. Some investors believed that the market had fallen too far recently and began to enter the market on dips. U.S. stocks opened higher on Tuesday (21st).
Before the deadline, the Dow Jones Industrial Average rose more than 400 points or nearly 1.5%, the Nasdaq Composite Index rose more than 250 points or nearly 2.5%, the S&P 500 Index rose nearly 2%, and the Philadelphia Semiconductor Index rose nearly 3%.
U.S. President Joe Biden said a U.S. recession was not “inevitable” but the outlook remained dangerous for investors assessing whether markets had bottomed. Historically, bear markets have often taken a while to end, especially in an environment that accompanies a recession, such as the 2008 financial crisis.
Markets are increasingly concerned about a recession and fears. Both Deutsche Bank and Goldman Sachs have previously warned that the risk of economic contraction is rising. Due to the negative impact of inflation and the conflict in Ukraine on the global economy, Goldman Sachs revised the probability of a recession next year from the previous 15%. to 30%.
In addition to Goldman Sachs, Tesla (TSLA-US) CEO Elon Musk also said at the Qatar Economic Forum on Tuesday that the U.S. economy is more likely to fall into a recession than it will not. At the same time, he also clarified Tesla’s large layoff plan, saying that it will lay off about 10% of full-time employees, but increase the number of part-time employees, while the overall number of employees will drop by 3.5%.
In addition, more and more central bank officials have hinted that they are willing to sacrifice the economy to stabilize prices. Huw Pill, chief economist of the Bank of England, said today that further monetary policy tightening is needed to deal with rising inflation, although he is also worried that this will affect the British economy. bring the risk of recession.
St. Louis Fed President James Bullard also warned that U.S. inflation is expected to get out of control if the Federal Reserve does not take convincing action.
As of 21:00 on Tuesday (21st) Taipei time:
Stocks in focus:
Lennar (LEN-US) rose 1.27% to $65.45 a share in early trade
American builder Lennar announced its latest earnings before the market, with an adjusted profit of $4.69 per share, exceeding market expectations of $3.96, and revenue performance was also better than market expectations. However, the company said it was looking to see the impact of higher interest rates and a rapid rise in home prices as the quarter drew closer.
Twitter (TWTR-US) rose 1.11% to $38.20 a share in early trade
Musk said Tuesday that three major hurdles need to be overcome before completing the Twitter acquisition: fake accounts, debt financing, and shareholder approval. Meanwhile, the board unanimously recommended that shareholders approve the sale of the company to Musk for $44 billion, according to a new filing by Twitter with the U.S. Securities and Exchange Commission (SEC).
Kellogg’s (K-US) rose 4.10% to $70.31 a share in early trade
Kellogg announced that it will be split into three separate public companies, namely the North American cereal business and plant division, its snack, noodles, international cereal and North American frozen breakfast brands, the former accounting for about 20% of the company’s total revenue last year, the latter Brands accounted for about 80% of last year’s revenue. Kellogg said it expects the tax-free spin-off to be completed by the end of 2023. The name of the new company has yet to be determined, and the two split shadow management teams will be announced at a later date.
Today’s key economic data:
- U.S. Existing Home Sales Reported at 5.41M in May, Expected 5.39M, Previous Value of 5.6M
- U.S. existing home sales rose 3.4% in May, down from -2.6%
Wall Street Analysis:
Seema Shah, strategist at Principal Global Investors, said investors may see value in companies that have slumped in share prices this year; however, once investors start to see a sustained decline in corporate earnings growth, stocks will fall further.
ActivTrades technical analyst Pierre Veyret said that although the investment outlook for the early to mid-summer period remains uncertain, some investors trying to enter the market on dips have seen an opportunity. Central banks are quickly turning super hawkish in an effort to curb inflation, which is also seen as good news by these investors.
