Following the lower-than-expected increase in the U.S. consumer price index (CPI) in October, the producer price index (PPI) also reported good news of cooling inflation in October, boosting the market that the Federal Reserve (Fed) will turn to a small interest rate hike As expected, the major U.S. stock indexes opened higher on Tuesday (15th).
Before the deadline,Dow Jones Industrial Averagerose more than 300 points or nearly 1%,Nasdaq Composite Indexrose more than 230 points or nearly 2.1%,S&P 500 Indexrose nearly 1.4%,Philadelphia SemiconductorThe index rose nearly 3.3 percent.
According to data released by the United States on Tuesday, the PPI rose 8% in October, which was lower than the market expectation of 8.3%, and also fell sharply from the revised value of 8.4%.
Excluding the more volatile food and energy, the core PPI of the United States in October increased by 6.7% year-on-year, down from 7.2% in the previous month, and also lower than market expectations of 7.2%; the monthly growth rate of PPI in October fell to 0%, lower than the previous month. Monthly 0.2% level and 0.3% expected value.
After the data was released, U.S. stocks were dominated by technology stocks before the market opened.Nasdaq 100 index futures rose 3%,S&P 500 IndexFutures also rose sharply, while U.S. 10-year Treasury yieldfell to 3.788%,US dollar indexIt also fell to 105.70.
Two consecutive data showed that U.S. inflation is cooling, and market risk appetite has improved. After four consecutive rate hikes of 3 yards (75 basis points), the Fed is expected to reduce the rate hike to 2 yards at the December meeting. (50 basis points). Fed Vice Chairman Lael Brainard also said a few days ago that it may soon be appropriate to slow down the pace of interest rate hikes.
In addition to the good news from PPI, good earnings from US retailers also contributed to market sentiment. Walmart (WMT-US) last quarter exceeded expectations, with revenue of $152.8 billion, beating analysts’ expectations of $147.516 billion; adjusted earnings per share were reported at $1.5, beating analysts’ expectations of $1.32. In addition, Walmart also announced a new $20 billion share repurchase program. Walmart shares rose 7.02 percent in early trading, to $148.11 per share.
As of 22:00 on Tuesday (15th) Taipei time:
Stocks in focus:
TSMC ADR (TSM-US) rose 11.78% to $81.38 a share in early trade
The latest filings show that Berkshire Hathaway, a subsidiary of “stock god” Buffett, spent more than $4.1 billion to buy TSMC (TSMC) in the third quarter.2330-TW) worth more than $4.1 billion, the news boosted TSMC’s US stock ADR up more than 12% in premarket trading. In addition, the hedge fund Tiger Global also added a new purchase of TSMC.
The Home Depot (HD-US) rose 1.9X% to $312.74 per share in early trade
Home Depot posted strong results last quarter, with revenue up 6% to $38.9 billion and earnings per share of $4.24, both beating analysts’ expectations of $37.96 billion and $4.12, but keeping forecasts unchanged, reiterated Sales in fiscal 2022 will grow by about 3%.
Tencent Music (TME-US) rose 16.18% to $5.17 a share in early trade
Tencent Music’s revenue and profit in the last quarter were better than Wall Street analysts’ expectations, and the stock price rose nearly 10% in the pre-market on the bullish news. The company’s strong performance last quarter was mainly due to an increase in the number of paying users.
Today’s key economic data:
- The annual growth rate of PPI in the United States in October was 8%, expected to be 8.3%, and the previous value of 8.4%
- The U.S. PPI monthly growth rate in October was 0.2%, expected 0.4%, and the previous value was 0.2%
- The annual growth rate of core PPI in the United States in October was 6.7%, expected 7.2%, and the previous value was 7.2%
- US core PPI monthly growth rate in October reported 0%, expected 0.3%, the previous value of 0.2%
Wall Street Analysis:
Goldman Sachs strategists believe the rally in U.S. stocks, driven by a return to risk sentiment, “may be overdone” after the S&P 500 recovered about 15% from its recent lows.
The weaker-than-expected growth of the U.S. consumer price index (CPI) in October triggered a surge in risk assets, while the dollar and U.S. bond yields fell sharply, but Goldman Sachs strategists reminded that a sharp rebound in a bear market is not uncommon, while extremely bearish positions It also “probably amplifies this trend.”
JPMorgan’s chief global market strategist advised clients to take advantage of a sustained U.S. stock market rally to trim exposure as recession risks remain “high.”
While a U.S. report last month showing slowing inflation raised the odds of a soft landing, strategists at JPMorgan see a recession averted with the federal funds rate approaching 5 percent. The odds of a soft landing will only increase unless the Fed commits to a “more meaningful turn.”