The August consumer price index (CPI) report released by the United States yesterday spooked the market, but the annual growth rate of the August producer price index (PPI) released on Wednesday (14th) fell for two consecutive months, allowing inflationary pressure to have breathing room , US stocks opened higher today, but the core PPI is still higher than expected.
Before the deadline,Dow Jones Industrial Averagerose more than 80 points, or nearly 0.3%,Nasdaq Composite Indexrose 0.3%,S&P 500 Indexrose nearly 0.4%,Philadelphia SemiconductorThe index rose more than 0.3 percent.
The U.S. PPI in August reported 8.7%, slightly lower than market expectations of 8.8%, a sharp drop from the previous value of 9.8%, and has declined for the second consecutive month, the lowest growth rate since August 2021, while the monthly growth rate of PPI in August Reported -0.1%, in line with market expectations, the previous value was revised up from -0.5% to -0.4%.
However, core PPI growth in August was still higher than expected. On a monthly basis, the core PPI in August increased by 7.3% year-on-year, higher than the market expectation of 7.1%, and the previous value was revised up from 7.6% to 7.7%; the core PPI in August increased by 0.4% month-on-month, higher than the market expectation of 0.3%, The previous value was revised up to 0.3% from 0.2%.
Yesterday’s August consumer price index (CPI) spooked investors and bloodshed US stocks, but the VIX, the fear index, did not soar, suggesting the sell-off was a recalibration of those expectations rather than panic selling. At the same time, the market has also determined that the Federal Reserve (Fed) will raise interest rates by 3 yards (75 basis points) next week, and the previous hope that the Fed’s policy path will be “dovish” due to the fall in inflation has been completely disillusioned.
It is worth noting that the market has also emerged that the Fed may raise interest rates by 4 yards (100 basis points) next week. Nomura Securities estimated that the Fed may raise interest rates by 4 yards after the CPI report was released yesterday. At the time of writing, according to the CME Group (Fed) FedWatch tool, the chance of a rate 3 rate hike was 68%, while the chance of a rate 4 rate hike rose to 32%.
In Europe, European Commission President Ursula von der Leyen delivered the annual EU State of the Union address this year, announcing specific plans for Europe to deal with soaring energy prices. Von der Leyen called on EU member states to cut peak-hour electricity consumption and impose a “windfall profits tax” on energy companies, but made no mention of a price cap for natural gas.
In the foreign exchange market, withJPYFalling to a near 24-year low against the U.S. dollar, the Bank of Japan made an “exchange rate inquiry” in currency markets today, a move seen as a step toward intervention.At the same time, Japanese Finance Minister Shunichi Suzuki also said that the intervention will be a deterrent to devaluation.JPYone of the options.
As of 21:00 on Wednesday (14th) Taipei time:
Stocks in focus:
Starbucks (SBUX-US) rose 4.31% to $91.63 a share in early trade
Global coffee chain giant Starbucks has revised up its sales and profit outlook for the next three years, as a rapid expansion strategy and an expected recovery in mainland China will boost results.
The company expects that in the next three fiscal years, earnings per share excluding some items can grow by 15%-20% annually, and same-store sales, a key indicator of the catering industry, can grow by 7%-9%, both of which are significantly better than previous forecasts. . The company also plans to return $20 billion to shareholders over the next three years.
Palo Alto Networks(PANW-US) fell 1.94% to $179.41 a share in early trade
Network security company Palo Alto Networks recently carried out a 3-for-1 stock plan. In addition, the company’s CEO Nikesh Arora said in an interview that the company’s business has not been affected by the global macroeconomic slowdown like other peers.
SoFi Technologies(SOFI-US) rose 1.97% to $5.96 a share in early trade
Tech finance company SoFi Technologies was favored by Wall Street investment bank Bank of America, which upgraded its stock to “Buy” from “Neutral”. Bank of America said that with the end of SoFi’s beneficiary student loan payment deferrals and its high-profile NFL-related marketing investments to drive user growth and engagement rates, it may have a catalyst effect in the next few operations.
Today’s key economic data:
- The U.S. PPI annual growth rate in August was 8.7%, expected 8.8%, and the previous value was 9.8%
- US August PPI monthly growth rate reported -0.1%, expected -0.1%, the previous value -0.4%
- The annual growth rate of core PPI in the United States in August was 7.3%, expected to be 7.1%, and the previous value of 7.7%
- The monthly growth rate of core PPI in the United States in August was 0.4%, expected 0.3%, and the previous value was 0.3%
- The change in U.S. EIA crude oil inventories last week (as of 9/9) reported 2.442 million barrels, expected 833,000 barrels, and the previous value of 8.844 million barrels
- US last week (as of 9/9) EIA gasoline inventory changes reported -1.767 million barrels, expected -858,000 barrels, the previous value of 333,000 barrels
Wall Street Analysis:
Seema Shah, chief strategist at Principal Global Investors, said the Fed has a long way to go, and the market is now pricing in a top rate of more than 4 percent. While there had previously been a sense that inflation was slowing, the data showed that inflation was stubbornly stubborn, prompting the Fed to step up its efforts.
Mathieu Racheter, head of equity strategy at Julius Baer, said easing inflation pressures later this year would allow the Fed to expand its focus again to combat a slowing economy, but it’s not there yet. He also said that corporate earnings expectations are likely to continue to adjust downwards, while higher real interest rates will dampen valuations, so he recommends maintaining a defensive position.
Mark Cabana, global head of U.S. rates strategy at Bank of America, said the Fed may raise rates too much to cool inflation and may not stop until the U.S. economy slips into recession.
A stronger dollar weighs on Asian currencies,wonIt is one of the currencies that has fallen the most. Chi Lo, senior market strategist for Asia Pacific at BNP Paribas Asset Management, said many emerging markets are feeling the heat of a strong dollar, and only China can hold out against rising global interest rates by maintaining an accommodative policy stance.