The U.S. business activity data in August was poor, and the market was still waiting for this week’s Federal Reserve Chairman Powell to speak at the annual meeting in Jackson Hole. The major U.S. stock indexes rose and fell on Tuesday (23rd). different.
Before the deadline,Dow Jones Industrial Averagedown nearly 0.2%,Nasdaq Composite Indexrose nearly 0.3%,S&P 500 Indexrose nearly 0.1%,Philadelphia SemiconductorThe index rose more than 1 percent.
The latest data shows that the U.S. Markit Manufacturing, Services, and Composite Purchasing Managers’ Index (PMI) hit a new low for more than two years in August, among which the service and composite PMI fell into contraction territory for the second month in a row, and the economy deteriorated significantly.
The initial value of the U.S. Markit services PMI in August was 44.1, lower than the expected value of 49.8, a 27-month low, and the previous value was 47.3; the initial value of the U.S. Markit manufacturing PMI in August was 51.3, lower than the expected value of 51.8, a 25-month record A new low, the previous value was 52.2; the initial value of the US Markit composite PMI in August was 45, a 27-month low, and the previous value was 47.7.
After U.S. stocks suffered their biggest drop in two months yesterday,S&P 500 IndexandNasdaq 100 Index futures were volatile. U.S. 10-year Treasury yields remain above 3%US dollar indexAlso hovering at a five-week high, investors are weighing fresh evidence that inflation and the Russia-Ukraine war are dragging the global economy into a recession.
Traders are bracing for possible hawkish remarks from Federal Reserve Chairman Jerome Powell at the annual meeting of global central banks in Jackson Hole, after recent comments from Fed officials led many investors to believe the central bank will continue to aggressively tighten its currency policy, even if economic growth slows. Still, some analysts believe Powell could catch market traders off guard in a more subtle way, sparking a new easing rally.
Markets initially rallied on bets that the Fed would change its path to raising interest rates next year, but financial institution ING said the market now expects Powell’s speech at Jackson Hole on Friday to suggest the Fed remains hawkish.
The Fed is currently walking on a tightrope, trying to control price pressures while avoiding a recession, and its quantitative tightening policy will kick off next month, creating another potential headwind for the stock market.
Europe,EURThe regional composite PMI has been below the line of prosperity and decline for two consecutive months, the economic sentiment continues to decline, the fear of recession intensifies, and the future path of the European Central Bank (ECB) to raise interest rates will be more difficult.
Data released by IHS Markit on Tuesday showed thatEURThe preliminary reading of the district’s August composite PMI was 49.2, slightly higher than the market expectation of 49, lower than the previous value of 49.9, and hitting an 18-month low.
On the energy front, Saudi Arabia’s Energy Minister Abdul Aziz said the “extreme” volatility and lack of liquidity in the crude oil futures market has driven oil prices away from fundamentals, potentially forcing the Organization of the Petroleum Exporting Countries and partners (OPEC+) to take action. The production cut led to a rebound in international oil prices on Tuesday, up more than 1%.
By press time, Brent October crude futures were up 1.45% at $97.88 a barrel; West Texas crude October futures were up 1.86% at $92.04 a barrel.
As of 21:00 on Tuesday (23rd) Taipei time:
Stocks in focus:
NIO (NIO-US) fell 4.67% to $18.07 in early trade
NIO is preparing to enter several new markets by the end of the year. Wall Street investment bank Deutsche Bank is optimistic about NIO’s long-term growth layout, and reiterates a “Buy” stock rating and a target price of $45 per share. NIO shares fell 0.9 percent in premarket trading on Tuesday, at $18.78 per share.
It is worth noting that Deutsche Bank analysts wrote in the report that Li Bin, the founder of Weilai Automobile, visited the headquarters of the future in the United States, and sent someone to look for the location of the first store of the future car in the United States in downtown San Francisco. The example reveals that NIO’s willingness to enter the U.S. market is quite strong. NIO previously said it would enter the U.S. market in 2025.
Warner Bros. Discovery (WBD-US) rose 1.10% to $12.85 a share in early trade
After Warner Bros. Discovery’s video streaming service HBO series “Game of Thrones” ended in May 2019, the audience’s discussion heat is still not extinguished, and the spin-off drama “House of the Dragon” was released on the HBO GO area of the CATCHPLAY + audio-visual platform yesterday (22nd), and a large number of fans were logging on the platform, causing HBO Max to crash for a time, with a total of 9.986 million viewers in the United States Watch to refresh the historical record.
Palo Alto Networks(PANW-US) rose 10.70% to $562.39 a share in early trade
Network security company Palo Alto Networks benefited from the booming demand for network security software and performed well in the last quarter, with revenue increasing 27% year-on-year to $1.6 billion and earnings per share of the industry at $2.39, both of which were better than previous estimates. In addition, the company’s executives said that due to the uncertainty of the future macroeconomic environment, the valuation is prudent, and announced that the stock will be split into three, and the split shares will start trading on September 14.
Today’s key economic data:
- U.S. July construction permits were revised to a monthly rate of -0.6%, the previous value was -1.3%
- The revised annualized total of building permits in the United States reported 1.685 million units in July, compared with the previous value of 1.674 million units
- The initial value of the US Markit Composite PMI in August was 45.0, expected to be 49.0, and the previous value of 47.7
- U.S. 8Markit manufacturing PMI initial value was 51.3, expected 52.0, the previous value was 52.2
- U.S. 8Markit services PMI initial value was reported at 44.1, expected 49.2, the previous value was 47.3
- US July new home sales monthly growth rate reported -12.6%, the previous value -7.1%
- The annualized total of new home sales in the United States in July reported 511,000 units, expected 575,000 units, and the previous value of 585,000 units
- The U.S. Richmond Fed manufacturing index reported -8 in August, -6 expected, the previous value was 0
- EURDistrict August consumer confidence index preliminary value reported -24.9, expected -28, previous value -27
Wall Street Analysis:
Richard Hunter, head of markets at Interactive Investor, said that the current global market sentiment is both vulnerable and volatile, there is little reason to be optimistic in the short term, and the silver lining of the economy has not yet formed a sustainable foundation.
Monica Defend, director of the Amundi Institute, said that Fed officials at last year’s Jackson Hole annual meeting said the inflation forecast was a blip, confusing investors, but prices were rising more and more for longer. The longer it goes on, the wider the scope of influence.
While corporate earnings are showing some resilience, margins will come under pressure later in the year, Defend said. Defend estimates,EURUSD/USD could fall further to 0.96 by December as Europe’s economic outlook is poor and the U.S. and the U.S.EURZones are on two different tracks.
Mathieu Racheter, head of equity strategy at Julius Baer, said the near-term outlook for equities remains challenging, the impact of quantitative tightening on financial markets has yet to materialize, and the earnings cut cycle is just beginning.