The market is worried that the determination of major central banks to continue to fight against inflation will plunge the economy into recession. In addition, the initial values of the U.S. manufacturing, service industry and composite purchasing managers’ index (PMI) in December were all lower than expected, deepening concerns about an economic recession. The main U.S. stock index weekly Five (16) ups and downs.
before the deadline,Dow Jones Industrial Averagefell more than 180 points or nearly 0.6%,NasdaqThe composite index rose 0.13%,S&P 500 Indexfell more than 0.4%,Philadelphia SemiconductorThe index rose 0.2 percent.
The U.S. Federal Reserve (Fed) and the European Central Bank (ECB) reiterated that interest rates will remain higher for longer before inflation falls back to their target levels. This has dampened market expectations for lower terminal interest rates and a possible rate cut next year, while also casting a shadow over the outlook for global economic growth.
Economists now see a 60% chance of a recession in the US and 80% in Europe, while stock market analysts have lowered their 12-month corporate earnings forecasts in these two regions to their lowest levels since March and July, respectively. Meanwhile, traders were digesting poor U.S. retail sales and manufacturing data, although the job market remained strong.
In the past few months, the Fed has aggressively raised interest rates several times in a row to reduce inflation. The logic of “bad news for economic data is good news for the market” dominates the trend of US stocks. The market believes that poor economic data means that the Fed has achieved some results in fighting inflation and cheered accordingly.
However, that logic has reversed as recession fears outweigh inflation concerns. U.S. stocks tumbled after weak retail and manufacturing data on Thursday.That fingerIt closed down 3.23%. Investors began to worry that the Fed’s excessive tightening would push the US economy into recession. UBS and other Wall Street investment banks also warned that the market has not yet fully priced in a recession, and US stocks will continue to fall.
S&P Global (S&P Global) announced on Friday that the U.S. December manufacturing PMI reported 46.2, which was lower than market expectations and the previous value of 47.7. The performance of the service industry PMI was also lower than expected. 46.2, while the composite PMI was 44.6, lower than market expectations of 47.0 and the previous value of 46.4.
In addition, U.S. stocks ushered in the “Four Witch Days” (referring to the maturity settlement of four derivative financial products) on Friday. Judging from historical experience, the transaction volume is bound to explode. At the opening and end of the day, commodity prices and the stock market will welcome Come shake violently.
As of 22:00 on Friday (16th) Taipei time:
Focus stocks:
Meta Platforms(META-US) rose 4.61 percent to $121.51 a share in early trade
Facebook and Instagram parent Meta is favored by JPMorgan Chase & Co. The investment bank upgraded Meta’s stock rating from “neutral” (neutral) to “overweight” (overweight), citing increased cost controls and the impact of Apple’s new privacy regulations eased. Shares of Meta were up nearly 2 percent in premarket trading.
Adobe(ADBE-US) rose 6.49 percent to $350.04 a share in early trade
Software company Adobe’s revenue and profit performance in the last quarter was outstanding, and its stock price rose 4.6% before the market. According to the financial report, Adobe’s last quarter revenue was reported at US$4.53 billion, which was in line with market expectations, while the adjusted profit per share was reported at US$3.6, which was better than market expectations. In addition, Adobe estimates that the adjusted profit per share for this quarter will be in the range of 3.65 to 3.7 US dollars, which is better than the market expectation of 3.65 US dollars; Adjusted earnings per share for the year ranged from $15.15 to $15.45, compared with expectations for $15.31.
Accenture (ACN-US) fell 3.09 percent to $272.44 a share in early trade
Shares in consulting firm Accenture fell 1.5% in premarket trading. While the company reported better-than-expected earnings last quarter, its median revenue forecast for the fourth quarter fell short of Wall Street analysts’ expectations and said a stronger dollar would have a 5 percent impact on its fiscal 2023 results.
Today’s key economic data:
- U.S. December manufacturing PMI initial value reported 46.2, expected 47.7, expected 47.7
- The initial value of the U.S. service industry PMI in December was 44.4, expected 46.8, expected 46.2
- U.S. composite PMI initial value reported 44.6 in December, expected 47.0, expected 46.4
Wall Street Analysis:
Stephen Innes, managing partner of SPI Asset Management, wrote in a report that the market is concerned that the finish line of the Fed’s interest rate hike is still unknown, while the European Central Bank (ECB) is also pushing interest rates into a restrictive range in addition to the Fed. , in the context of an increasingly pessimistic macro environment, tightening policies will undoubtedly trigger an economic recession, and the key point is whether the degree of recession is mild or severe.
Ann-Katrin Petersen, senior investment strategist at BlackRock Investment Institute, said central banks are starting to admit that they will have to steer inflation down by curbing growth and possibly engineering a recession.