Federal Reserve Chairman Powell exacerbated the sell-off in U.S. bonds after his hawkish speech yesterday, with yields on 10-year and two-year U.S. government bonds soaring, but investors gradually digested the news, and U.S. stocks opened higher on Tuesday (22nd). Before the deadline,Dow Jones Industrial Averageup nearly 215 points or nearly 0.62%,Nasdaq Composite Indexup 0.68%,S&P 500 Indexup 0.57%,Philadelphia SemiconductorThe index rose 0.19%.
Powell said at the economic meeting a few days ago that he would stabilize inflation and would not adopt a more aggressive policy, saying that if necessary, he would raise interest rates by 2 yards in May. After the hawkish remarks, U.S. bond yields rose on Monday, and the U.S. two-year Treasury yields rose to 2.17% at one point, the highest since the outbreak, while the U.S.10-year Treasury yieldIt also rose to 2.34% at one point, hitting a new high since May 2019. Goldman Sachs expects the Fed to raise interest rates by 2 yards two times and by 1 yards four times next.
Stocks, bonds, commodities and currencies have tumbled over the past month on volatility as investors assess the economic impact of the Russia-Ukraine war, which many investors fear could keep inflation high and hinder the U.S. and European economic growth.
However, Powell’s recent remarks have created new conundrums for investors, with a more hawkish tone, repeatedly emphasizing the uncertainty facing the central bank and saying central bankers are prepared to turn policy in a more damaging direction.
The EU plans to impose an oil ban on Russia, but Germany and Hungary have opposed it, deepening differences within the EU over sanctions against Russia.Brent CrudeFutures steadied after trading in a range of $119 to $113 a barrel.
As of 21:00 on Tuesday (22nd) Taipei time:
Stocks in focus:
Alibaba (BABA-US) rose 9.90% to $113.85 a share in early trade
Chinese e-commerce giant Alibaba announced that it plans to increase its treasury stock plan to US$25 billion, setting a record for Chinese stocks. This is also the second time that Alibaba has increased the amount of repurchase in the past year. The company’s board of directors has authorized an increase in share buybacks from $15 billion to $25 billion, and the treasury stock program is valid for two years until the end of March 2024.
Nike(US-US) rose 4.87% to $136.53 a share in early trade
Nike, a major sporting goods manufacturer, benefited from digital sales growth and successfully responded to supply chain problems. It delivered a dazzling report card in the third quarter. Revenue increased by 5% year-on-year to US$10.87 billion, which was better than market estimates of US$10.59 billion; Q3 net profit Although down 3.4% year-on-year to $1.4 billion, adjusted earnings per share were $0.87, far exceeding consensus estimates of $0.71.
Tencent Music (TME-US) rose 5.16% to $4.89 a share in early trade
Tencent Music’s fourth-quarter financial report of last year was roughly in line with market expectations, and its revenue fell 8.7% year-on-year.RMB 7.61 billion yuan, adjusted earnings per share after deducting one-time itemsRMB $0.50. Notably, revenue from online music services grew by 4.3%.
In addition, Tencent Music plans to be listed on the main board of the Hong Kong Stock Exchange in the form of an introduction, which means that no additional fundraising will be involved. The company’s $1 billion share repurchase program announced in March last year is more than halfway through and continues.
Today’s key economic data:
- U.S. March Richmond Fed manufacturing index at 13, expected 2, the previous value of 1
- In the United States the week (as of March 17), the Red Book same-store retail sales index reported 12.4, the previous value was 12.6
Wall Street Analysis:
Christian Mueller-Glissmann, managing director of portfolio strategy asset allocation at Goldman Sachs, said the current situation is quite disturbing for the market, and the Fed’s tightening cycle is quite risky in the early stages, which has the potential to slow economic growth.
Huw Roberts, director of Quant Insight, a data analysis company, said that the Fed signaled last week that it would tighten monetary policy, but the United States has enough flexibility to bear this situation, but Powell’s comments yesterday broke some market expectations. The biggest variable is the issue of economic growth.
Sameer Samana, senior global market strategist at Wells Fargo Investment Institute, said: “…the Fed may need to rewrite the playbook at some point – it has to raise rates every meeting, and does not rule out a one-time rate hike of more than 25 basis points, or even Rate hikes and quantitative tightening have to be done at the same time.”