The Federal Reserve Board of Governors issued a hawkish signal to raise interest rates, and data showed weak consumption. The main US stock index fluctuated within a narrow range on Friday (14th) and closed in the dark. Benefiting from the positive financial report, bank stocks bucked the trend and closed higher, with JPMorgan Chase (JPM) soaring more than 7%.
Dow JonesIt closed down more than 140 points on Friday, while the other three major indexes also closed slightly black. Looking at the week,Dow JonesIt rose 1.2 percent for the week, extending its fourth weekly gain. The S&P rose 0.79% for the week,That fingerIt was up 0.29% for the week, with both indexes posting their fourth straight weekly gain in five.
In terms of data, U.S. retail sales fell 1% month-on-month in March, far worse than market expectations and the largest drop since November 2022. Core retail sales fell 0.8% in March, also worse than expected. The retail sales report cast an ominous light on U.S. gross domestic product (GDP) in the second quarter.
Bank of America pointed out in its latest consumer report that rapid wage growth in the U.S. is weakening, which may prevent consumers from maintaining past spending amid rising inflation, and consumption will shrink.
In terms of politics and economy, US Federal Reserve (Fed) Governor Waller (Christopher Waller) said on Friday that the Fed still needs to raise interest rates further to curb inflation, warning investors that they should not expect interest rates to fall in the short term.
JPMorgan Chase & Co. Chief Executive Jamie Dimon said investors and companies should prepare for rates to remain higher for longer than the market currently expects.
However, Austan Goolsbee, a member of the FOMC this year and president of the Federal Reserve Bank of Chicago, once again urged the Fed to take a cautious approach to tightening policy on Friday. He pointed out: “You can’t look at the world and the United States and think that There is no way a mild recession will happen.”
Republicans in the U.S. House of Representatives are considering delaying the debt limit battle for a year to May 2024 in exchange for spending concessions from the Biden administration, but Democrats are not expected to support it. US Treasury Undersecretary Eddie Yemo (Wally Adeyemo) on Friday urged Congress to raise the debt ceiling as soon as possible, otherwise it will create a crisis of confidence and damage US economic growth.
The performance of the four major US stock indexes on Friday (14th):
Seven of the 11 major S&P sectors closed in the dark, led by real estate, utilities and health care sectors, while financials, communication services, energy and consumer discretionary sectors bucked the trend and closed higher.
Focus stocks
The five kings of technology were mixed. Amazon (AMZN-US) up 0.11%; Meta (META-US) rose 0.52%; Apple (AAPL-US) down 0.21%; Alphabet (GOOGL-US) down 0.21%; Microsoft (MSFT-US) fell 1.28%.
Dow JonesComponent stocks led by Boeing. Boeing (BA-US) plunged 5.56%; Traveler (TRV-US) down 2.79%; UnitedHealth (UNH-US) fell 2.74%; JPMorgan Chase (JPM-US) soared 7.55%; Goldman Sachs (GS-US) rose 1.44%.
fee halfMore than half of constituent stocks were weak. Micron (MU-US) fell 0.59%; Huida (NVDA-US) rose 1.11%; AMD (AMD-US) down 0.37%; Applied Materials (AMAT-US) down 0.50%; Texas Instruments (TXN-US) down 0.073%; Qualcomm (QCOM-US) down 0.80%.
ADRs of Taiwan stocks were mixed. TSMC ADR (TSM-US) up 0.17%; ASE ADR (ASX-US) up 0.68%; UMC ADR (UMC-US) down 0.59%; Chunghwa Telecom ADR (CHT US) fell 0.54%.
Corporate News
The U.S. stock earnings season kicks off this week, kicked off by banking stocks. Benefited from the Federal Reserve’s interest rate hike, JPMorgan Chase’s profit in the first quarter surged 52% to US$12.62 billion, a record high. The adjusted profit per share was US$4.32, which was better than expected. JPMorgan (JPM-US) soared 7.55% to $138.73 per share on Friday, its best one-day performance since November 2020.
Citigroup also reported good news. Citigroup’s net profit in the first quarter increased by 7% year-on-year to US$4.6 billion, and its adjusted net profit per share was US$1.86, both of which were better than Wall Street’s expectations. Citigroup (C-US) surged 4.78% to US$49.56 per share.
Wells Fargo’s first-quarter net profit climbed 45% to $13.34 billion, and its adjusted net profit per share was $1.23, both of which were better than analysts’ expectations. Wells Fargo (WFC-US) closed down 0.05% to US$39.64 per share in a shock on Friday.
Dow JonesUnitedHealth, the most weighted among the constituent stocks, also reported good news in its latest financial report and slightly raised its financial forecast. However, investors are worried that policy changes next year will affect short-term Medicare Advantage profits. Allied Health (UNH-US) fell 2.74 percent to $511.79 a share on Friday, snapping a six-session winning streak.
Boeing (BA-US) tumbled 5.56% to $201.71 per share. Boeing has halted deliveries of its 737 MAX jets after finding compliance issues with parts from a supplier.
apple (AAPL-US) closed down 0.21 percent at $165.21 a share. Apple is rumored to be testing the long-rumored 15-inch MacBook Air. It is reported that the processor of this MacBook Air is comparable to the M2 chip. Apple hopes that this new product will help reverse the decline in its notebook sales.
Tesla (TSLA-US) slipped 0.48% to $185.00 per share. According to foreign media reports, Musk, the world’s second richest man and CEO of Tesla, intends to establish an artificial intelligence (AI) start-up company X.AI, which will compete with OpenAI, which developed ChatGPT.
Economic data
- The monthly rate of the U.S. import price index in March was -0.6%, expected -0.1%, and the previous value was -0.2%
- The monthly rate of the U.S. export price index in March was -0.3%, expected -0.1%, and the previous value was 0.4%
- U.S. retail sales in March reported -1.0%, expected -0.4%, previous value -0.2%
- U.S. March retail sales reported an annual rate of 2.94%, expected 5.90%, and the previous value of 5.88%
- U.S. core retail sales in March reported -0.8%, expected -0.3%, previous value 0%
- The monthly rate of industrial production in the United States in March was reported at 0.4%, expected 0.2%, and the previous value was 0.2%
- The initial value of the U.S. consumer confidence index in April was 63.5, expected 62, and the previous value was 62
Wall Street Analysis
Paul Ashworth, chief North American economist at Capital Economics, wrote: “Overall, retail sales were not as bad as we had expected, and real consumption growth should be closer to 4.5% in the first quarter, with GDP growth at 1.8%, which may be enough to convince the Fed to raise rates by a quarter in May.”
“We had expected more bad news from the regional banks, but that may not materialize in the next few weeks,” said Art Hogan, chief market strategist at B. Riley Financial.
“Current bank results suggest that the largest financial institutions in the U.S. have so far managed to weather the impact of tightening,” said Equiti Capital analyst Stuart Cole.
The numbers are all updated before the deadline, please refer to the actual quotation