US Federal Reserve (Fed) Chairman Jerome Powell will deliver a speech later in the day. The market will pay close attention to the content of the speech and look for signs of a slowdown in the pace of Fed interest rate hikes. Major US stock indexes opened flat on Wednesday (30th).
before the deadline,Dow Jones Industrial Averagefell nearly 50 points or 0.15%,Nasdaq Composite Indexup 0.4%,S&P 500 Indexup nearly 0.1%,Philadelphia SemiconductorThe index rose more than 0.4%.
Before the US stock market opened, the ADP employment data, known as the “small non-agricultural industry”, was released. The results showed that the job market had cooled down, bringing hope to the market that the Fed would slow down the pace of interest rate hikes, and the US stock index rose. According to the report released by ADP, the number of new jobs in the United States fell from 239,000 in October to 127,000 in November, far below market expectations of 200,000, the lowest since January.
ADP chief economist Nela Richardson said turning points in the labor market may be difficult to capture, but the data suggest that the Fed’s tightening policies are having an impact on job creation and wage growth. In addition, the number of corporate resignations is also decreasing, and the post-epidemic recovery is stabilizing.
In addition, the U.S. Department of Commerce’s Bureau of Economic Analysis (BEA) released data on the same day that the U.S. real gross domestic product (GDP) quarterly growth rate in the third quarter was revised to 2.9%, an increase of 0.3 percentage points from the initial value, higher than expected 2.8%. Meanwhile, the personal consumption expenditures (PCE) price index, a key indicator of inflation, rose by a revised 4.6% in the third quarter, beating expectations for a 4.5% increase but lower than the previous reading of 4.7%.
Investor expectations for a slowdown in rate hikes by the Fed and growing optimism about China’s reopening weighed on the dollar, putting it on track for its worst month since 2010.Another United States 10-Year Treasury Bond YieldIt has fallen by more than 25 basis points since November.
Still, traders remained cautious ahead of Powell’s comments given that global inflation remains elevated. It is widely expected that Powell may suggest that the next rate hike will slow down to 2 yards (50 basis points), but he may also warn that policy tightening will take a step further.
In other news, data released by Eurostat showed thatEURThe initial value of the harmonized consumer price index (CPI) in the region increased by 10% in November, lower than market expectations of 10.4%, down from 10.6% in the previous month, and the largest drop since 2020. The slow pace of interest rate hikes provides breathing room.
As of 22:00 on Wednesday (30th) Taipei time:
Focus stocks:
Xpeng Motors (XPEV-US) rose 22.21% to $8.97 a share in early trade
Xiaopeng Motors, one of China’s new carmakers, announced its third-quarter financial report before the market. Due to the impact of the new crown epidemic and China’s blockade measures on car production and sales, although revenue increased by nearly 20%, it still fell short of market expectations, and losses expanded by nearly 20% 50% fell far short of expectations.
At the same time, Xiaopeng Motors also gave a bleak financial forecast. It is expected that the delivery of cars in the fourth quarter will only be between 20,000 and 21,000 vehicles, an annual decrease of about 49.7% to 52.1%, which is lower than expected. It is also the company’s fourth consecutive year. Quarterly deliveries fell. However, the poor financial report and bleak financial forecast did not seem to affect the ADR rally of Xiaopeng Motors, which rose nearly 10% before the market.
Airbnb(ABNB-US) rose 1.60% to $96.91 a share in early trade
Lodging platform Airbnb is working with several major property and management companies to list designated buildings that allow tenants to offer short-term sublets on the site. The company said it will offer a new page on its website listing so-called Airbnb-friendly buildings, which will give tenants the option to host their apartments just like homeowners.
HPE Technologies (HPE-US) rose 0.84 percent to $15.59 a share in early trade
Hewlett Packard Enterprise Company (Hewlett Packard Enterprise Company) benefited from the growth of its cloud and AI businesses, and its fourth-quarter earnings beat expectations. The company’s revenue rose 7% to $7.871 billion last quarter, beating expectations of $7.43 billion, and adjusted earnings per share were $0.57, beating expectations of $0.56.
HPE also reaffirmed its previous full-year guidance of up to $2.04 in adjusted earnings per share and up to $2.1 billion in free cash flow. The company also said it will spend at least $500 million on share buybacks this fiscal year. The company also said it was a bit premature to update its full-year guidance as supply chain and currency volatility continued to pose headwinds, and indicated that it did not have any layoffs planned at this time.
Today’s key economic data:
- U.S. ADP reported 127,000 new jobs in November, compared with 200,000 expected and 239,000 previously
- U.S. third-quarter GDP quarterly growth rate revised to 2.9%, expected 2.7%, previous value 2.6%
- U.S. consumer spending grew at a revised 1.7% annual rate in the third quarter, compared with 1.4% expected and 2% previously
- In the third quarter of the United States, the core PCE price index quarterly growth rate was revised to 4.6%, expected 4.5%, and the previous value was 4.7%
- The initial monthly rate of U.S. wholesale inventories in October was reported at 0.8%, expected to be 0.5%, and the previous value to be 0.6%
Wall Street Analysis:
Kenneth Broux, a strategist at Societe Generale, said that the market focused on Fed Chairman Jerome Powell’s speech. If the content showed a dovish stance, it would be an unexpected result. Some believe the federal funds rate will peak at 5%, but Powell may have poured cold water on that expectation in his speech.
James Athey, director of investment at Abrdn, said the market would like to see good news from a moderate shift in China’s stance on the blockade, but the reality is that a full reopening will take some time and be politically tricky to execute.