The better-than-expected retail sales data once again raised concerns about the Federal Reserve’s hawkish interest rate hike. US retail giant Target’s (Target) poor financial outlook dragged retail stocks down. Micron will reduce supply of memory chips next year , triggering selling pressure on technology stocks All four major indexes were out of ink on Wednesday (16th).
The Dow Jones closed up nearly 40 points on Wednesday, the S&P fell more than 0.8%, the Nasdaq fell more than 1.5%, and Fei Ban fell more than 4%.
In terms of data, US retail sales rose 1.3% in October, better than the market forecast of 1%, and significantly better than the flat performance in September The strong data shows that the Federal Reserve has still more work to do to fight inflation. After the data was released, the inversion of the 2-year and 10-year US Treasury yield curves intensified, and the bond market is flashing more obvious recession risks.
In terms of politics and the economy, Mary Daly, president of the Federal Reserve Bank of San Francisco, opined that the final interest rate is expected to be between 4.75%-5.25% to curb inflation. Fed Governor Waller (Christopher Waller) said that recent economic data should lead the central bank to at least consider slowing the pace of rate hikes at its next meeting in December. At the same time, sources indicated that the European Central Bank may also slow the pace of interest rate hikes, and only raise interest rates by 2 yards next month.
“Russian missiles” falling on Poland can activate Article 5 of the NATO Convention, the “Collective Defense Clause”. The Polish government said the incident should have been an anti-aircraft missile from Ukraine and that the crash was not a deliberate attack, allaying concerns about an escalation of the military conflict.
NATO Secretary General Jens Stoltenberg said that Russia, which launched the war on Ukraine, was primarily responsible for the attack, although it was not a deliberate attack.
The new global epidemic of coronavirus pneumonia (COVID-19) continues to spread. Before the deadline, data from Johns Hopkins University (Johns Hopkins University) indicated that the number of confirmed cases worldwide had exceeded 636 million, and that the number of deaths had exceeded 6.61 million. More than 12.7 billion doses of vaccines have been administered in 184 countries worldwide.
The performance of the four main US stock indexes on Wednesday (16th):
Focus stocks
Five kings of technology were mixed. Apple (AAPL-US) fell 0.83%; Alphabet (GOOGL-US) rose 0.42%; Microsoft (MSFT-US) rose 0.18%; Meta (META-US) fell 3.29%; Amazon (AMZN-US) fell 1.84%.
Dow Jones components traded up and down. Salesforce (CRM-US) down 4.29 percent; Dow Chemical (DOW-US) down 2.11 percent; 3M (MMM-US) down 1.89 percent; McDonald’s (MCD-US) up 1.74 percent; UnitedHealth (UNH-US)) up 1.69%.
The sound of Fei Ban’s killing echoed. NVIDIA (NVDA-US) fell 4.54%; Applied Materials (AMAT-US) fell 5.65%; Texas Instruments (TXN-US) fell 2.31%; Micron (MU-US) fell 6.70%; Intel (INTC-US) fell 3.84 %; Qualcomm (QCOM-US) fell 4.20%; AMD (AMD-US) fell 4.81%.
Taiwan stock ADR was bloody. TSMC ADR (TSM-US) fell 1.26%; ASE ADR (ASX-US) fell 2.83%; UMC ADR (UMC-US) fell 6.20%; Chunghwa Telecom ADR (CHT-US) fell 0.23%.
Corporate News
Department store Target (Target) halved its profit in the last quarter and warned of poor sales in the year-end shopping season, dragging its stock price down 13.06% to US$155.47 a share on Wednesday. Other retail stocks fell dominoes together, Macy’s (M-US) plunged 8.13%, Kohl’s (KSS-US) plunged 7.11%.
Micron (MU-US) fell 0.16% to $43.58 a share. Micron said on Wednesday it will reduce memory chip supply and plans to further cut capital spending as demand forecasts continue to weaken in 2023 along with excess inventory. In addition, Micron has announced that its most advanced 1β (1-beta) process DRAM chips will be imported to Taiwan for production next year, and will not be affected by the “de-Taiwanization” issue .
Tesla ( TSLA-US ) fell 3.86% to $186.92 a share. Tesla investors accused Musk of excessive compensation. Tesla Chairman Robyn Denholm said the reason Tesla gave Musk a sky-high salary of 55 billion US dollars was to allow Musk to focus on Tesla.
Economic data
- US core retail sales rose 1.3% in October, compared with 0.4% expected and 0.1% previously
- US retail sales rose 1.3% in October, 1% expected, 0% previously
- US retail sales excluding automobiles and gasoline rose 0.9% in October, expected to be 0.2%, and the previous value was 0.6%
Wall Street Analysis
“The fall in demand for semiconductors is likely to continue for a longer period of time, which could weigh on the broader technology sector,” Wedbush analysts speculated.
“The recent rally in the market has been too high, and it should have pulled back so that everyone can spend the recent rally,” said Adam Sarhan, CEO of 50 Park Investments.
Although US stocks were lower on Wednesday, some analysts continued to bet that stocks could go higher by the end of the year, although the rally may not be smooth sailing.
Janney Montgomery Scott analysts believe: “We expect the overall market to be moderately higher by the end of the year. This does not assume a smooth market, as even after some inflation data begins to cool, there is uncertainty general economic remains high.”
All numbers are updated before the deadline, please refer to the actual quote
