followEURThe regional inflation rate rose to a record high in May, international oil prices rose due to the EU ban, and the market was concerned regarding inflation once more. US stocks opened lower on Tuesday (31st), withDow JonesIt fell nearly 400 points as investors focused on a later meeting between U.S. President Joe Biden and Federal Reserve Chairman Powell.
Before the deadline,Dow Jones Industrial Averagedown nearly 400 points or nearly 1.17%,Nasdaq Composite Indexdown 0.87%,S&P 500 Indexfell more than 1%,Philadelphia SemiconductorThe index fell 1.54%.
U.S. President Biden will meet Fed Chairman Powell on Tuesday (31st) in Powell’s first meeting with the president since his re-election in the Senate; Biden is seeking to reduce inflation that has pushed inflation to 40 years High cost of gasoline, food and consumer goods.
U.S. stocks opened lower on Tuesday as investors grew increasingly concerned that rising inflation in the U.S. and around the world might slow economic growth.EURThe consumer price index (CPI) in May rose by 8.1% year-on-year, hitting a record high for seven consecutive months. In addition, the core personal consumption expenditures price index (PCE) in the United States in April increased by 4.9% year-on-year.
In terms of energy, the EU reached an agreement on sanctions once morest Russia on Monday, and reached a consensus on the embargo on Russian oil. It will cut off 90% of Russian oil imports by the end of this year. International oil prices rose sharply due to the news. expiredBrent CrudeFutures rose 1.52% to $123.52 a barrel, while West Texas crude for July expiration rose 3.35% to $118.93 a barrel.
Oil prices might rise further amid tight global crude supplies, Europe’s decision to cut Russian oil imports, soaring U.S. summer demand and China’s easing of lockdowns, analysts warned.
Investors are closely watching fears that a central bank rate hike will trigger a recession, stubbornly high inflation and uncertainty over how China will bolster a weakening economy.
In Europe, with food and energy prices soaring, according to Eurostat data released on Tuesday, following AprilEURAfter the regional consumer price index (CPI) climbed to 7.4%,EURThe region’s preliminary May reconciled CPI rose 8.1% y/y, beating economists’ forecast of 7.8% and hitting another record high, fueling debate over how quickly the European Central Bank (ECB) will raise interest rates from record lows.
The European Central Bank is preparing to raise rates for the first time since 2001 as the U.S. and U.K. raise rates across the boardEURThe 19 member states of the region saw unprecedented price spikes.
As of 21:00 on Tuesday (31st) Taipei time:
Stocks in focus:
NIO (NIO-US) rose 4.83% to $17.37 a share in early trade
Shares in Chinese electric car maker NIO rose more than 5 percent in premarket trading following Morgan Stanley added its shares to its “tactical idea” list. Morgan Stanley believes that with the relaxation of epidemic prevention restrictions in Shanghai, NIO will benefit from subsidies for electric vehicle purchases, and its stock price will rise.
Zoom(ZM-US) fell 0.51% to $109.86 a share in early trade
Investment bank Daiwa Securities sees the recent pullback in tech stocks as an upside opportunity, and its growth expectations for Zoom now look more realistic, raising its stock rating on video conferencing platform Zoom from “underperform” to “outperform”. Outperform.
Yamana Gold (AUY-US) rose 8.41% to $5.61 a share in early trade
South AfricagoldMining group Gold Fields (GFI-US) has agreed to buy Canadian rival Yamana Gold in an all-stock deal for an expected price of regarding $6.7 billion. Yamana shareholders will receive 0.6 shares of Gold Fields for each share they hold, giving them regarding 39 percent of the combined company and a market value of $15.6 billion. The offer represents a 33.8% premium to Yamana’s average share price over the past 10 days.
Today’s key economic data:
- US May Chicago PMI reported 60.3, expected 55.0, the previous value was 56.4
- The U.S. Conference Board Consumer Confidence Index in May reported 106.4, expected 103.9, and the previous value of 108.6
Wall Street Analysis:
Sonal Desai, director of fixed-income investing at Franklin Templeton, said the Fed’s tightening cycle will be more frequent this time around, and policy rates and bond yields will have to be higher than the market currently expects. The risks associated with asset prices and economic growth are greater than many would like to admit.
Ryan Grabinski, investment strategist at Strategas, said it’s possible to see some sharp rallies in stocks, but that doesn’t represent a real turning point in the market, adding that the formation of a bear market is a process that has the potential to fall further.
Mike Bell, global market strategist at JPMorgan Asset Management, said that it is difficult to have a firm belief that it is reasonable to be neutral on equities, and in fact it is reasonable to be fairly neutral on bonds. The possibility of supply in retaliation for EU action on oil “would make me cautious regarding my current approach to overweight risk assets”.