The market is waiting for the US Federal Reserve (Fed) to announce its interest rate decision later. The main indexes opened flat on Wednesday (22nd). The Fed will seek to balance inflation and banking concerns at the meeting. Come to the most challenging decision ever.
before the deadline,Dow Jones Industrial Averagefell more than 30 points or 0.1%,Nasdaq Composite Indexfell more than 20 points or nearly 0.2%,S&P 500 Indexfell nearly 0.1%,Philadelphia SemiconductorThe index rose nearly 0.6 percent.
Before the US stock market opened, the three major index futures were mixed, and the market waited for the Fed to announce its interest rate decision. The Fed will announce a summary of interest rate decisions and economic expectations at 2:00 a.m. Taiwan time on Thursday (23rd), followed by Fed Chairman Jerome Powell’s monetary policy press conference. The Fed needs to consider whether to raise interest rates again without knowing whether its efforts to boost the banking sector will work in the long run.
Judging from the current market expectations, the camp that believes that the Fed will announce a rate hike of 1 yard (25 basis points) later still accounts for a relatively majority. According to the CME Group FedWatch Tool, the probability of raising interest rates by 1 yard is 87.8%, and the probability of keeping interest rates unchanged is only 12.2%.
In addition, major Wall Street banks such as Bank of America and JPMorgan Chase also believe that fighting inflation is still the Fed’s top priority, and a sudden cancellation of interest rate hikes may even have the opposite effect of panicking the market.
In other news,Dow JonesThe Stoxx Europe 600 Index rose for a third straight day, led by gains in the banking sector, as concerns about the financial system eased after UBS’s takeover of Credit Suisse.
Inflation in the UK has unexpectedly risen. As the catering and retail industries have raised prices, the UK inflation rate has hovered at double digits for six consecutive months.
The National Bureau of Statistics of the United Kingdom announced on Wednesday that the consumer price index (CPI) in February increased by 10.4% year-on-year, which was an increase in the growth rate in four months. This value was much higher than expected. up 10.1%.
The Bank of England is due to announce on Thursday whether to raise interest rates for an 11th straight time, with investors divided on whether it will pause the rise in its borrowing costs amid recent turmoil in the global banking sector.
As of 21:00 on Wednesday (22nd) Taipei time:
Focus stocks:
GameStop(GME-US) rose 45.01% to $25.59 per share premarket
Shares of GameStop rose nearly 50% premarket. The company’s revenue in the fourth quarter of last year fell 1.2% year-on-year to US$2.23 billion, but it was better than the previous forecast of US$2.18 billion, and its net profit was US$48.2 million, the first profit in two years. GameStop CEO Matt Furlong said: “The company’s business is much healthier today than it was in early 2021, and we have the means to achieve a full year of profitability.” However, the company did not provide a full-year forecast for this year.
Boeing (BA-US) fell 1.69% in early trade to $201.24 per share
Boeing Chief Financial Officer Brian West said Wednesday that Boeing will charge extra for the KC-46 tanker due to quality issues with suppliers for the center tank. West did not disclose the value of the extra charge, which will be revealed when the company reports first-quarter earnings, but said it would turn profitability in its defense business into negative territory as a result. Shares of Boeing fell 1.3 percent in premarket trading.
Nike(OF THE US) fell 1.84% in early trade to $123.30 per share
Shares of Nike fell about 1.1 percent in premarket trading, even though the company beat market expectations for revenue and net income last quarter. However, Nike’s revenue in China fell short of analysts’ expectations while it continued to drain inventory, putting pressure on profit margins.
Today’s key economic data:
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Wall Street Analysis:
Kathy Bostjancic, chief economist at Nationwide Life Insurance, believes that the current price in the bond market reflects that the Fed may start to cut interest rates from June, and it is estimated that the rate will be cut by about 60 basis points before the end of the year. However, the market reaction may be premature, barring a larger financial crisis, but the situation is getting worse. The slowdown in inflation may be faster than previously expected but still not low. The U.S. economy will enter a mild recession from the second half of this year, and the risk of a hard landing is heating up.
Inflation expectations have been falling ahead of the Fed meeting, Bob Michele, chief investment officer of fixed income at JPMorgan Asset Management, said in an interview. In addition, the Fed must intervene in the banking crisis to prevent a bank run. Under the double attack of inflation and the banking industry, the pressure on the Fed is enormous.