Meta shares rose more than 12% in early trading, leading the U.S. stock market to open higher on Thursday (28th) as Facebook parent company Meta’s bright report boosted technology and growth stocks, offsetting market concerns about an unexpected contraction in U.S. economic growth in the first quarter. , the four indices are up.
Before the deadline, the Dow Jones Industrial Average rose more than 100 points or nearly 0.4%, the Nasdaq Composite rose nearly 1%, the S&P 500 rose 0.77%, and the Philadelphia Semiconductor Index rose more than 2%.
The U.S. Commerce Department announced on Thursday that gross domestic product (GDP) in the first quarter was negative at an annualized rate of 1.4%, which was not only lower than the 1% expected in the previous quarter, but also much lower than the 6.9% in the previous quarter, the first contraction since 2002. In addition, the first-quarter core PCE price index released on the same day climbed to 5.2%, which was lower than the market expectation of 5.4%, but still higher than the previous value of 5%.
On the other hand, the U.S. Department of Labor announced the latest unemployment benefits data. The number of people receiving unemployment benefits last week was 180,000, a decrease of 5,000 from the previous revised 185,000, which was in line with market expectations, but the labor market was still tight. The number of Americans continuing to receive unemployment benefits was reported at 1.408 million, slightly higher than market expectations of 1.403 million.
Some economists believe the risk of a further slowdown is growing, with high inflation as a major factor. U.S. economic growth is under threat from the highest inflation in 40 years, as Russia’s invasion of Ukraine pushes up commodity prices, while tightening monetary policy is also weighing on growth as the Federal Reserve vows to fight inflation.
But the quarter’s economic data is unlikely to change the Fed’s policy course. The Fed raised its benchmark interest rate by 25 basis points (a yardage) from near zero in March, and has indicated that it will accelerate by 50 basis points (2 yards) in May. Investing in the futures market now expects the Fed to raise its benchmark interest rate to 2.7% by the end of the year, from just over 0.25% today.
Despite realizing that the risks of an economic downturn are rising, most economists believe the Fed will be able to control inflation without triggering a recession, saying that given unemployment near record lows, steadily rising incomes and consumers Debt levels are relatively low, and the U.S. economy is bracing for higher interest rates.
The labor market is a key area where the strength of the U.S. economy is currently being displayed. First-time jobless claims are hovering near record lows as employers struggle to hire workers amid a shortage of available workers, as companies try to raise wages to hire workers, supporting consumer spending, a key driver of the U.S. economy .
The rebound in U.S. stocks underscored the reasons for this week’s volatility, including the outbreak in China, the Russian-Ukrainian war and fears that the Fed’s tightening of monetary policy could tip the U.S. economy into recession.
Amazon (AMZN-US) and Apple (AAPL-US) are set to report after the market close on Thursday, and investors are keeping an eye on the two companies’ potential outsized impact on the stock market. In addition, Twitter (TWTR-US) released its last earnings report before Musk took the company private, with first-quarter revenue of only $1.2 billion, below expectations of $1.23 billion, and adjusted earnings of $0.9 per share , of which the lower-than-expected revenue reflected slower growth in the company’s advertising business.
As of 21:00 on Thursday (28th) Taipei time:
Stocks in focus:
Meta (FB-US) rose 13.18% to $198.01 per share in early trade
Although Facebook’s parent company Meta’s revenue in the first quarter only increased by 7% to $27.91 billion, which was lower than the market’s expected $28.2 billion, the US stock profit was reported at $2.72, which was better than the market’s expected $2.56. In addition, daily active The number of users (DAU) was strong, rebounding slightly since its first decline last quarter, at 1.96 billion, beating StreetAccount’s forecast of 1.95 billion.
Qualcomm (QCOM-US) rose 6.23% to $143.52 a share in early trade
Qualcomm’s revenue in the second quarter of fiscal 2022 increased by 41% to $11.16 billion, beating market expectations of $10.6 billion, and its diluted earnings per share was reported at $3.21, up 69% from the same period last year, beating market expectations of 2.91 In US dollars, second-quarter net profit also surged 68% to US$3.66 billion.
In addition to the core smartphone business, the performance of the automotive and Internet of Things (IoT) businesses has grown significantly compared with last year, showing that the business diversification strategy has achieved results. Better-than-expected $9.97 billion, Non-GAAP earnings per diluted share were expected to be in the range of $2.75-$2.95, beating expectations of $2.60.
Pinterest (PINS-US) rose 7.82% to $20.13 a share in early trade
Social media platform Pinterest reported better-than-expected earnings in the last quarter, with adjusted earnings of $0.10 per share, beating market expectations of $0.04. Revenue rose 11% to $575 million, also beating market expectations of $573 million. Dollar. Global average revenue per user rose 28% to $1.33 a year, beating Wall Street’s estimate of $1.31.
Today’s key economic data:
- Last week (as of 4/23), the number of people receiving initial unemployment benefits in the United States reported 180,000, the expected 180,000, and the previous value of 185,000
- Last week (as of 4/16) the number of people receiving unemployment benefits in the United States reported 1.408 million, the expected 1.403 million, and the previous value of 1.409 million
- U.S. first-quarter GDP annual growth rate initially reported -1.4%, expected 1.1%, the previous value of 6.9%
- The U.S. core PCE price index in the first quarter initially reported an annual growth rate of 5.2%, expected 5.4%, and the previous value of 5%
Wall Street Analysis:
Art Hogan, chief market strategist at National Securities, said the earnings season as a whole has brought more good news than bad news, which could help market investors shift their attention away from the macro headwinds that have battered major indexes this month, adding that at this point in time. Of the 140 S&P 500 companies that have reported earnings, 77% have beaten earnings estimates and 65% have raised their full-year forecasts, pushing up the overall S&P 500 earnings forecast.
John Roe, head of multi-asset funds at Legal & General Investment Management, believes that the recent volatility in the market highlights investors’ anxiety at a time when fundamental uncertainty is particularly high High levels, and the volatility of the bond market is also the highest since the outbreak of the financial crisis.
