Wall Street on Tuesday (25th) due to concerns that the Federal Reserve (Fed) may resort to more aggressive tightening policies, coupled with the tension in Ukraine and Russia, pushed up investors’ risk aversion, the dollar and gold prices continued to rise, and oil prices rose Boosting energy stocks, U.S. stocks fell after the opening bell, and then the decline expanded rapidly, with the Dow Jones plummeting more than 800 points at one point. In the late trading session, the Dow Jones and S&P once again reversed the market on Monday, but the selling pressure of technology stocks continued. In the end, the four major indexes collectively closed in the black.
In political and economic news, the Federal Reserve held a two-day interest rate policy meeting on Tuesday. Goldman Sachs strategists believe that the risk of an “economic growth shock” for the stock market is increasing, and the Federal Reserve will significantly tighten monetary policy to curb inflation. This has a knock-on effect on economic activity, thereby hurting the stock market.
The U.S. Department of Commerce announced on Tuesday the results of a survey of 150 semiconductor supply chains. The demand for chips in 2021 will be 17% higher than in 2019. The shortage of chips will continue this year due to insufficient production capacity. Demand will continue to far exceed supply. The median value of key chip inventories has been From 40 days to less than 5 days, the chip supply chain remains fragile.
Affected by the two major economies of the United States and China, the International Monetary Fund (IMF) revised down its forecast for global economic growth this year to 4.4%, 0.5 percentage points lower than its previous forecast. Meanwhile, the IMF expects inflation to last longer than expected, but should ease by the end of the year as the supply-demand imbalance subsides in 2022.
In geopolitical news, Russia’s invasion of Ukraine may be imminent. Wally Adeyemo, deputy secretary of the US Treasury Department, said that the United States and its European allies are ready to impose economic sanctions at any time to prevent Russian forces from pressing into Ukraine.
Before the deadline, according to data from Johns Hopkins University in the United States, the number of confirmed cases worldwide has exceeded 357 million, and the number of deaths has exceeded 5.61 million. More than 9.98 billion doses of vaccines have been administered in 184 countries worldwide. The World Health Organization (WHO) has warned that the next coronavirus variant will be more contagious than omicron, but the question is whether it will be more deadly.
The performance of the four major U.S. stock indexes on Tuesday (25th):
- The Dow Jones Industrial Average fell 66.77 points, or 0.19%, to 34,297.73.
- The Nasdaq lost 315.83 points, or 2.28 percent, to end at 13,539.29.
- The S&P 500 lost 53.68 points, or 1.22%, to end at 4,356.45.
- The Philadelphia Semiconductor Index fell 129.10 points, or 3.71%, to 3,350.85.
The five kings of science and technology fell together. Apple (AAPL-US) fell 1.14%; Meta (formerly Facebook) (FB-US) fell 2.77%; Alphabet (GOOGL-US) fell 2.96%; Amazon (AMZN-US) fell 3.15%; Microsoft (MSFT-US) ) fell 2.66%.
Dow components were mixed. American Express (AXP-US) rose 8.92%; IBM (IBM-US) rose 5.65%; Chevron (CVX-US) rose 4.25%; Salesforce (CRM-US) fell 3.43%; Walgreens United Boots (WBA-US) fell 2.65%; Walmart (WMTUS) fell 2.18%.
Fei half of the constituent stocks into the hardest hit area. Applied Materials (AMAT-US) fell 4.52%; AMD (AMD-US) fell 4.63%; NVIDIA (NVDA-US) fell 4.48%; Intel (INTC-US) fell 1.81%; Micron (MU-US) fell 2.69% ; Qualcomm (QCOM-US) fell 2.72%.
Taiwan ADR was the worst performer with UMC. TSMC ADR (TSM-US) fell 2.76%; ASE ADR (ASX-US) fell 2.77%; UMC ADR (UMC-US) plunged 7.15%; Chunghwa Telecom ADR (CHT-US) rose 0.21%.
American Express (AXP-US) rose 8.87% to $173.11 per share. American Express’ fourth-quarter profit beat expectations as cardmember spending hit a record high.
Johnson & Johnson (JNJ-US) rose 2.69% to $167.63 a share. Johnson & Johnson’s earnings report was mixed, but the forecast was successful. The company forecast 2022 new crown vaccine sales of $3.5 billion, better than Wall Street’s expectations.
Graphics chip leader Nvidia (NVDA-US) fell 4.48% to $223.24 a share. Foreign media quoted sources as saying that Nvidia is preparing to abandon its $40 billion acquisition of British chip design company ARM, mainly due to obstacles from antitrust regulators.
U.S. drugmaker Pfizer and German biotech company BioNTech announced the start of a clinical trial of a new crown vaccine against Omicron. Pfizer (PFE-US) rose 1.90% to $52.54 per share. BioNTech (BNTX-US) rose 3.65% to $156.49 a share.
Moody’s, an international credit rating agency, is optimistic about Tesla’s leading position in electric vehicles and raised its credit rating by 2 notches from “Ba3” to “Ba1”. Tesla (TSLA-US) fell 1.25% to $918.40 a share.
- The annual growth rate of the S&P CS 20 major city house price index in November was 18.29%, compared with the previous value of 18.41%
- US November FHFA house price index monthly growth rate was reported at 1.1%, expected 1.1%, the previous value of 1.1%
- The U.S. Economic Federation consumer confidence index reported 113.8 in January, expected 111.9, and the previous value of 115.2
Wall Street Analysis
John Luke Tyner, portfolio manager at Aptus Capital Advisors, said investors will be watching closely whether Fed Chairman Powell continues to address rising inflation risks and whether there is any kind of communication about ending the tapering program early, if the Fed Indicating how to take advantage of the tightening policy plan of the shrinking balance sheet, the impact on the market will be huge.
Cyclical stocks such as energy and financials contrasted sharply with technology growth stocks on Tuesday, and against the background of higher U.S. bond yields, technology stocks may continue to be under pressure going forward.
Tyner mentioned that rising interest rates may affect some companies that are not profitable, but for companies like Microsoft or Apple, and some companies that are really good growth, the 10-year US Treasury yield is 1.5% or 2%. Not so important.
(The figures are updated before the deadline, please refer to the actual quotation)