Us retail sales grew faster than expected in October, and a number of Fed officials poured cold water on doves such as suspending interest rate hikes, but did not rule out the possibility that Goldman Sachs Group raised expectations of a peak interest rate after slowing down in December. European and American stock markets fell, chip stocks dragged the Nasdaq down 1.5%, Target Corp's poor financial results fell 13%, Tencent ADR rose more than 5%.
The yield on two-year / 10-year Treasuries is upside down by more than 65 basis points, the deepest range in 40 years. Oil prices hit a three-week low, with US oil trading down more than 3 per cent and European natural gas down 14 per cent. The dollar was pushed to a three-month low, and Lenny fell 12% at one point.
Retail sales in the United States rose 1.3% in October from a month earlier, the highest level since February, or supported the Fed's policy of raising interest rates unchanged, while US stocks fell, while the Nasdaq index, which is dominated by technology stocks and sensitive to interest rate policy, fell more than 1%.
The remarks of several Fed officials threw cold water on the dove's turn, all of whom supported further interest rate hikes, but did not rule out slowing down from December:
Williams, chairman of the New York Federal Reserve, said that mitigating the risk of financial stability should not be taken into account when making the decision to raise interest rates, and reiterated the importance of restoring price stability.
Daley, chairman of the San Francisco Federal Reserve in 2024, said that at least one percentage point of interest rate hike is needed, the suspension of interest rate hike is no longer considered, and the focus of the central bank discussion is to slow down the pace of interest rate hike and interest rate peak.
Waller, the resident voting committee and governor of the Federal Reserve, supports continuing to raise interest rates, even though a 50 basis point rate hike in December is still a sharp tightening of policy.
Futures markets believe that it is certain that the Fed's rate rise slowed to 50 basis points in December, with a terminal interest rate range of 4.75% and 5%. Goldman Sachs Group raised the peak interest rate forecast by 25 basis points to 5% Murray 5.25%. In addition to raising interest rates by 50 basis points in December, interest rates will be raised by 25 basis points in February, March and May next year. Economists JPMorgan Chase & Co predict that the Fed's rate hike will push the United States into a "mild" recession next year.
Expectations of a rise in the Fed's terminal interest rate on Wednesday
UK inflation hit the chart again, with CPI rising 11.1 per cent in October from a year earlier, the 41-year high since October 1981 and up 1 percentage point from the pre-September level. The European Central Bank has warned that the risk of financial stability in Europe is rising and the possibility of a technical recession is increasing. Us stock market midday news said ECB officials might prefer to raise interest rates by 50 basis points in December rather than the 75 basis points previously expected.
Chip stocks dragged the Nasdaq down 1.5%, while Target Corp led retail stocks down by 13%.
On Wednesday, November 16th, geopolitical tensions in Eastern Europe cooled due to unexpected events. Key retail stocks such as Target Corp reported poor results in three quarters. The three major indexes of US stocks collectively opened low. The Nasdaq index, which is dominated by technology stocks, opened down nearly 100 points or 0.9%. The decline was relatively deepest.
Us stocks closed near the day's lows, the Dow tried several times to rise but it was difficult to maintain, the S & P 500 index drifted away from the 4000 integer, the Nasdaq fell nearly 200 points, or 2.7%, and Russell small-cap stocks fell as much as 2% and far away from 1900.
The Standard & Poor's 500 index fell 32.94 points, or 0.83%, to 3958.79. The Dow closed down 39.09 points, or 0.12%, at 33553.83. The Nasdaq closed down 174.75 points, or 1.54%, at 11183.66. The Nasdaq 100 index closed down 172.06 points, or 1.45%, while the Russell 2000 small-cap index fell 1.9%.
Russell small-cap stocks fell nearly 2%, leading the main index down, while chip stocks dragged the Nasdaq down 1.5%.
Most star technology stocks fell."Yuan Universe" Meta fell more than 3%, stopped rising for five days and lost its three-week high. Amazon.Com Inc, who opened some layoffs in the hardware department, fell more than 3 per cent at one point. Apple Inc, who had a six-week delay in the delivery of high-end flagship iPhone 14 Pro/Max phones, fell nearly 2 per cent. Netflix Inc fell 1.4 per cent to a seven-month high, while Tesla, Inc. fell nearly 4 per cent. Alphabet, the parent company of Microsoft Corp and Alphabet Inc-CL C, rose.
Chip stocks fell more deeply.The Philadelphia semiconductor index fell 4.3%, losing 2800 and 2700 integer digits. Micron Technology Inc fell nearly 7 per cent to a three-month high, warning of a weaker market outlook in 2023 and cutting supplies of DRAM and NAND chips. AMD fell nearly 5 per cent, Lam Research Corp fell more than 7 per cent and Applied Materials Inc fell 5.6 per cent. NVIDIA Corp fell 4.5 per cent, third-quarter revenue fell 17 per cent from a year earlier but exceeded market expectations, data center growth was strong, EPS was lower than expected, and rose nearly 3 per cent in after-hours trading.
Target Corp, the second-largest retailer in the United States, fell nearly 17%, the biggest drop in six months, closed down 13%, halved its profit in the third quarter, cut its sales and profit guidance for the year-end shopping season, and CEO warned consumers that they were increasingly affected by inflation, interest rate hikes and economic uncertainty.
Other retail stocks fell at the beginning of the day, narrowed their losses at midday, and many stocks rose. Walmart Inc, who rose 6.5 per cent after yesterday's positive results, rose 0.7 per cent, Home Depot rose 1 per cent, Dollar General, a cheap grocery store, closed down 0.4 per cent after falling 2.6 per cent, and warehouse giant Costco Wholesale Corp closed down 0.5 per cent after falling more than 1 per cent. Cole is down more than 7%, Macy's and Nordstrom are down more than 8%, and SPDR Simpp Retail ETF is down nearly 4%.
Other stocks with significant changes include:
Home improvement retailer Lowe's rose 3 per cent to its highest level in three months, beating expectations in revenue and profit in the third quarter and raising its full-year profit guidance. But the company lowered the upper limit of its full-year revenue guidance and did not rule out a 1 per cent drop in full-year comparable sales.
Carnival cruise ships fell more than 13%, falling from a three-month high as a private offering of $1 billion in convertible bonds due in 2027 as a refinancing plan for bonds maturing in 2024, while other cruise operators fell.
Advance Auto Parts, the second-largest US auto parts company, fell 15 per cent to the lowest since February last year, the biggest decline since March 2020, poor revenue and earnings in the third quarter and weak full-year profit guidance. But competitor O'Reilly Auto Parts rose 1 per cent.
Hot China is likely to follow the decline of US stocks:
Both ETF KWEB and CQQQ fell more than 3 per cent, while the Nasdaq Golden Dragon China Index (HXC) fell more than 4 per cent from a six-week high. Of the four constituent stocks on the Nasdaq, JD.com fell nearly 2%, Pinduoduo fell nearly 5%, while Baidu, Inc. fell 5% and NetEase, Inc fell 0.4%. Among other stocks, BABA fell 1.5 per cent, XPeng Inc. nearly 11 per cent and Li Auto Inc. more than 6 per cent.
Tencent reported stable results in three quarters, with net profit falling for four consecutive quarters compared with the same period last year, and Tencent ADR up more than 5 per cent. HUYA Inc. 's performance was the worst when it fell by more than 13%, Weipin fell by 3%, DouYu International Holdings Limited fell by nearly 11%, and NIO Inc. fell by more than 8%.
European stocks fell amid geopolitical tensions in Eastern Europe:
The pan-European Stoxx 600 index and the German stock index both fell about 1%, while the pan-European stock index retreated from a three-month high and suffered its biggest decline in six weeks. German stocks fell to a five-month high and the euro zone Stoxx 50 index fell from a seven-month high.
Retail and automotive stocks fell more than 3%, Mercedes-Benz European stocks fell more than 6%, U. S. stocks fell nearly 5%, leading European auto stocks lower.
Long-end US bond yields fell to a session low in late trading, with the two-year / 10-year curve hanging upside down the deepest in 40 years, while European bond yields fell in double digits.
Long-end Treasury yields fell even more, with 30-year yields falling below their 50-day moving average. The key two-year / 10-year yield curve is upside down by more than 65 basis points, the deepest in 40 years since 1982, underscoring fears of a recession.
The two-year / 10-year Treasury yield is upside down by more than 65 basis points, the highest level since 1982.
The yield on 10-year Treasuries fell 12 basis points to a session low of 3.68% late in the day, breaking its six-week low since October 5. At midday, the two-year yield, which is more sensitive to monetary policy, erased a fall of 4 basis points and rose at one point, then fell slightly in late trading and traded at 4.35%.
Long-end Treasury yields fell even more, with two-year yields up 2 basis points this week and 30-year yields down 17 basis points.
Reports that the ECB may slow the pace of interest rate hikes to 50 basis points in December sent double-digit bond yields sharply lower. 10-year and 30-year German bond yields fell 11 basis points and lost 2 per cent, while two-year German bond yields fell more than 7 basis points to a session low of 2.10 per cent.
Before the chancellor of the exchequer unveiled his new budget on Thursday, 10-year gilt yields fell more than 14 basis points, hovering around a daily low of 3.12 per cent, two-year yields fell nearly 11 basis points and lost 3 per cent 30-year bonds fell 16 basis points.
The two-year / 10-year German bond yield curve was reversed for the first time since 2008 last week and has deepened this week, reaching a 14-year high of nearly 10 basis points on Wednesday. Investors are betting that the ECB will loosen its austerity stance early next year as the recession falls.
Geopolitical tensions and demand concerns are intertwined, with oil prices falling to a three-week low, US oil trading down more than 3% and European natural gas down 14%.
WTI December crude oil futures closed down $1.33, or 1.53%, at $85.59 a barrel. Brent January crude oil futures closed down $1, or 1.06%, at $92.86 a barrel.
In US stocks, the US oil WTI fell as much as $2.72 or 3.1%, the daily low forced $84, and the international Brent fell as much as $2.33 or 2.5%, losing $92 at one point, a three-week low.
Geopolitical tensions raised oil prices at one point, demand concerns then depressed oil prices, and the more-than-expected decline in US EIA oil reserves narrowed the decline in oil prices.
There was earlier news that an oil tanker in the Gulf of Oman was suspected of being hit by a drone attack from Iran, and geopolitical tensions briefly pushed up oil prices. But concerns about the outlook for demand prevailed again, and oil prices accelerated again. The International Energy Agency (IEA) expects global oil demand growth to slow sharply from 2.2m b / d this year to 1.6m b / d in 2023.
The latest data show that US EIA commercial crude oil inventories plunged 5.4 million barrels last week, far more than expected a decline of 1.9 million barrels and a previous increase of nearly 4 million barrels, while the short-term decline in oil prices narrowed. Us crude oil imports last week hit their lowest level since May last year, but higher-than-expected growth in gasoline and refined oil inventories raised demand concerns.
European natural gas, which rose more than 20% on Monday and about 7% on Tuesday, fell 14% today. Benchmark TTF Dutch natural gas futures fell more than 14 per cent to a new low of 106euros per megawatt, losing integer digits of 110euros and rising above 120euros yesterday. British natural gas also fell 14 per cent to a daily low of 257p / kcal, up from 300p yesterday.
The dollar index pushed 106 to a three-month low.
The dollar index DXY, a basket of six major currencies, rose 0.4% at one point, while u.s. stocks fell to 106.20 in intraday trading, hovering at a three-month low. Analysts say this is related to the cooling of geopolitical tensions in Eastern Europe, leading to a pullback in demand for risk aversion.
The dollar index pushed down 106, hovering around a three-month low
At one point, the euro rose nearly 1% against the dollar, while U. S. stocks halved their intraday gains by 1.04, the highest in four and a half months. Sterling rose above 1.19 against the dollar to a three-month high. The yen fell below 139 against the dollar, still near a two-and-a-half-month high. The dollar hovered against the Swiss franc at its lowest level in seven months.
Gold fell slightly from a three-month high, London metal generally fell more than 1%, and Lenny fell 12% at one point, the deepest drop in eight months.
Gold futures fell slightly for two consecutive days after a three-day rise. COMEX December gold futures closed down nearly 0.1% at $1775.80 an ounce, still not far from their highest level since August.
Spot gold rose 0.3 per cent to $1785 at one point, while US stocks fell after midday and fell 0.4 per cent, re-pushing $1770 in integer digits, down from a three-month high set on Tuesday since mid-August. Analysts say this is mainly due to the easing of geopolitical tensions.
Gold futures fell slightly for two consecutive days after a three-day rise, with an intraday trading range of $1770 to $1780.
Industrial base metals in London fell on Wednesday as the dollar strengthened before the close and worried about the demand outlook.
Lun Copper, which fell 1.4 per cent yesterday, fell another $83, or 1 per cent, to lose $8300 after hitting a five-month high of $8600 on Monday. Lun aluminum fell nearly 1 per cent and fell for three days in a row, while zinc fell nearly 2 per cent and lost $3100, while lun lead fell more than 2 per cent and lost $2200, ending 11 consecutive gains and falling off a three-month high.
Lenny, which rose 15 per cent yesterday hit the daily limit, closed up more than $1410 or 5 per cent, closed down $2722 or nearly 9 per cent, and fell below the triple digits of $30, 000 to $28000, after falling 12 per cent, the biggest drop since March. However, Lunxi, which rose more than 6 per cent or nearly $1360 yesterday, rose another $249 or 1 per cent, rising for nine consecutive days and standing above $23000 for two days in a row.
Analysts pointed out that copper prices rose 15% in November, profit-taking accelerated price decline, while LME inventories are abundant, spot copper against three-month futures has changed from a premium of more than $100 to a discount of $30, indicating that short-term supply concerns have eased. At the same time, nickel prices have fallen sharply from a six-month high, highlighting the low liquidity plight of the market since the "demon nickel" was forced out in March and deteriorating trading conditions.
The Black Sea passage agreement for Ukraine's grain exports is expected to be extended at the end of the month. Us wheat futures rose and fell 1.5% for three days, hitting an one-week high since November 8 yesterday. Chicago soybean futures fell nearly 2%. Corn futures closed down 0.3% after falling 1%.
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