The market is worried that the Fed has raised interest rates too much, leading to a recession and the Dow has fallen below 30,000 points | Anue Juheng- US Stocks

Investors worried that the Federal Reserve’s aggressive interest rate hikes to fight inflation will lead to a recession The main US stock indexes opened lower on Friday (23rd), and the Dow Jones Industrial Average fell below 30,000 points.

Before the deadline, the Dow Jones Industrial Average fell nearly 400 points or nearly 1.3%, the Nasdaq Composite fell nearly 200 points or nearly 1%, the S&P 500 fell nearly 1.7%, and the Philadelphia Semiconductor Index fell more than 2%.

To stimulate domestic demand and save an economy teetering on the brink of recession, the British government has launched a £45 billion tax cut, including canceling plans to increase corporate tax to 25%, scrapping the top tax rate of 45 %, and cut stamp duty, and much more.

The tax cuts are said to be bigger than those introduced in 1988 under the “Iron Lady” Margaret Thatcher, and are the biggest in half a century.

British government bonds fell sharply and the pound fell to its lowest level in 37 years as markets priced in a more aggressive pace of tightening in Britain to offset monetary stimulus. At the same time, the US dollar index hit a new high, and the 10-year US Treasury yield climbed to a 10-year high.

While the US dollar continues to rise and markets expect the Fed to further tighten interest rates by 1.25 percentage points by the end of the year, a surprise rate cut by Turkey’s central bank pushed the lira to a record low, its biggest weekly drop in 23 years.

Goldman Sachs cut its year-end target for the S&P 500 to 3,600 from 4,300, signaling a path for higher rate hikes by the Federal Reserve. On the other hand, strategists have given up their expectations for a year-end rally in European stock markets, as the Eurozone Markit Manufacturing Purchasing Managers’ Index (PMI) reported 48.5 in September, below the 48.7 expected and the previous value of 49.6.

Goldman Sachs also said the outlook for US stocks is “very uncertain”, with inflation, economic growth, interest rates, earnings and valuations all changing, and most stock investors believe a landing hard is “inevitable.” The bank also noted that investors’ focus in the short term will shift from interest rate concerns to corporate earnings.

In terms of data, the initial value of the Markit US manufacturing PMI in September was 51.8, which was better than the market expectations of 51.1, and the previous value was 51.5. The initial PMI value was reported to be 49.3, which is 49.3. better than the previous value of 44.6.

From 21:00 on Friday (23rd) Taipei time:
S&P 500 daily chart. (Photo: Juheng.com)
Stocks covered:

FedEx (FDX-US) fell 2.19% to $151.16 a share in early trade

FedEx (FedEx) announced on Thursday that its revenue and profit in the last quarter were not as good as expected, It also announced that the package shipping fee for most services will increase by an average of 6.9% in January next year, and will implement cost-saving measures this year, hoping to save money, the next cost from $2.3 billion to $2.7 billion. The company’s Express, Ground and Home Delivery services will increase package rates by an average of 6.9%, and Freight services will see an average increase of 6.9% to 7.9%.

Boeing (BA-US) fell 2.39% to $135.39 a share in early trade

Boeing will pay $200 million and then CEO Dennis Muilenburg $1 million as a settlement to investors it allegedly misled after two 737 Max crashes, the US Securities and Exchange Commission (SEC) said Thursday. Neither Boeing nor Muilenburg has admitted or denied its findings, the SEC said.

Qualcomm (QCOM-US) fell 3.34% to $119.56 a share in early trade

Qualcomm announced at its first Automotive Investor Conference that thanks to the widespread adoption of Snapdragon digital chassis solutions in the automotive industry, the total order book for its automotive business has grown to $30 billion. This growth represents an expansion of more than $10 billion in the total valuation of Qualcomm’s automotive business orders since it reported its fiscal third quarter 2022 earnings.

Today’s key economic data:

September Markit US manufacturing PMI initial value was 51.8, expected 51.1, previous value was 51.5

US Markit services PMI initial value was 49.2, expected 45, previous value was 43.7

The initial value of the US Markit Composite PMI was 49.3, the previous value was 44.6

Wall Street Analysis:

“There has been very little positive news at the moment, and this sentiment could eventually fuel some level of selling … we are definitely close to near-term lows,” said Rick Meckler, partner at Cherry Lane Investments.

“A recession in the euro zone is likely as business conditions for companies deteriorate and price pressures related to rising energy costs increase,” said Chris Williamson, chief business economist at S&P Global. “Preliminary PMI data suggests the economy will contract by 0.1 in the year. third quarter. %.”

Bank of America Securities strategist Michael Hartnett called the current bond crash “the third great bond bear market,” calling the situation “extremely dire.” He said a bond collapse would threaten global credit events and settlement transactions, including those in the US dollar, US technology stocks, private equity and more.


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