On the 16th (local time), the major indexes of the New York Stock Exchange were mixed. However, the overall mood was weak. Inflation and recession fears underpinned the market.
The leading index, the S&P 500, finished trading at 4,008.01, down 0.39% from the previous day, the Nasdaq Composite fell 1.20% to 11,662.79, and the Dow rose 0.08% to 32,223.42, respectively.
There was some low-priced buying, but the negative factors were far more numerous.
△Fear of a global recession due to China’s COVID-19 lockdown measures △Remarks by Federal Bank of New York Governor John Williams that “inflation is a top priority” △Empire State manufacturing index -11.6 in May (market estimate 24.6) △Goldman Sachs’ end-of-year S&P 500 forecast 4700 → 4300 downgrade is a typical example.
Retail sales in China fell 11.1% in the same month last year. Industrial production also fell 2.9%. The unemployment rate was 6.1%, well above the government’s management target of 5.5%.
It was confirmed that retail sales, industrial production and investment in China contracted significantly last month. Concerns about a global economic downturn have grown.
New York Fed President John Williams has again raised concerns about inflation. He emphasized that “inflation is too high and persistent” and that “it is appropriate to raise the base rate by 50 basis points (0.5 percentage points) at future monetary policy meetings.”
However, Governor Williams said, “We are seeing the impact of inflation on some consumption.”
The Empire State Index, a coincident indicator for manufacturing in New York and New Jersey, recorded a sharp negative. It plummeted by more than 35 points compared to the previous month. The index measures expansion and contraction on a zero basis.
Among individual stocks, Twitter shares fell 8.1% to close at $37.39 per share. This is a big difference from the bid price of Tesla CEO Elon Musk ($54.2).
Musk tweeted that “Twitter spam or robot accounts (a kind of fake account) will account for 80-90% of all accounts,” and “it is certain that at least 20% of them are over.” It was clear that it was willing to take over at a price that was much lower than the original offer price ($44 billion).
Twitter stock fell sharply after Tesla CEO Elon Musk announced on the 16th (local time) that he would buy Twitter at a lower price.
Former U.S. President Donald Trump said, “I don’t think Musk is going to buy Twitter at an exorbitant price.” Former President Trump recently created and operated his own social media (SNS), TrueSocial.
The lower the probability of Musk’s takeover of Twitter, the more favorable the structure for TrueSocial. Thanks to this, the stock price of SPEC (Digital World Acquisition Corp, DWAC), which is scheduled to merge with Trump’s TrueSocial, surged 8.98% on the day.
The details of the first quarter investment reports submitted by institutional investors to the U.S. Securities and Exchange Commission (SEC) were also released on the same day.
What drew attention was the change in investment strategy of Berkshire Hathaway Chairman Warren Buffett. It was confirmed that Buffett made additional purchases of Occidental Petroleum Chevron Activision Blizzard HP Apple during the first quarter.
During the global financial crisis, Michael Burry, who raised a lot of money by betting on the decline in stock prices, bought a total of 206,000 Apple put options. He was betting on a decline in Apple’s stock price. However, Booking Holdings, Alphabet Signa, etc., were purchased.
Hedge fund Tiger Global sold stocks such as Netflix, Adobe Coupang, PayPal, Sunrun, etc. in the first quarter.
The prevailing view is that it will not be easy for the US central bank (Fed) to induce a soft landing.
International oil prices rose.
The price of West Texas Intermediate (WTI) for June on the New York Mercantile Exchange stood at $112.71 per barrel, up 0.1% from the previous day. On the London ICE Exchange, the price of Brent crude on the North Sea route rose 1.2% to $112.89.
Today’s ‘Global Market Now’ issues are as follows.
① Wheat price jumps too much ② Rivian plunges ③ ECB, cryptocurrencies check again ④ Bernanke also criticizes the Fed ⑤ Big short, betting on Apple stock price decline ⑥ Buffett’s new investment.
More details can be found on Hankyung Global Market YouTube and Hankyung.com broadcasts.
New York = Correspondent Jo Jae-gil email@example.com