On the evening of the 29th Beijing time, US stocks opened higher on Thursday. The US core PCE index recorded the biggest increase in a year in January, supporting Fed policymakers to adopt a cautious interest rate cut strategy.
As of press release, the NASDAQ is up 0.83%, the S&P 500 is up 0.43%, and the Dow is up 0.11%.
Craig Johnson, chief market technical analyst at Pipeer Sandler, believes that US stocks will soon experience a 10% correction; this is due to some technical signals appearing in the market, which indicate that the stock market is not ready to rise further.
Goldman Sachs strategy expert Scott Rubner said that facts have proven that it is impossible to predict the top of the current round of US stock gains. He said that at a time when the proper scenario of the economy was neither hot nor too cold, retail traders were attracted to this round of gains, which prompted analysts to quickly raise their year-end targets.
According to Ulrich Urbahn, head of multi-asset strategy and research at Berenberg, transactions on the last day of February are likely to be more affected by month-end rebalancing than by data, as inflation trends have already been reflected in the market after the release of this month's Consumer and Producer Prices (PPI) report.
“It makes sense to focus on personal consumption spending 'because it's the Fed's prefer',” Urbahn said, “but it's basically a foregone conclusion. The market will be more affected by some rebalancing capital flows, as the stock market performed much better than bonds this year.”
On Thursday, US stock investors welcomed the much-publicized January personal consumption expenditure (PCE) price index report. This data is an important reference indicator used by the Federal Reserve when considering interest rate cuts.
According to data released by the US Department of Commerce's Bureau of Economic Analysis on Thursday, overall PCE, including the volatile food and energy categories, grew 0.3% month-on-month, up 2.4% from the same period last year, compared with expectations of 0.3% and 2.4%, respectively.
Excluding food and energy costs, the core personal PCE index for January rose 0.4% from the previous month, the biggest increase since February 2023.
The core PCE index rose 2.8% in January compared to January last year, the smallest increase since March 2021.
The data also showed that personal income unexpectedly rose 1% month-on-month, far higher than the expected 0.3%. Personal spending fell 0.1%, while expectations were for a 0.2% increase.
Another data shows that for the week ending February 24, the number of initial jobless claims in the US was 215,000, expected to be 210,000, compared to the previous value of 201,000.
Analysts pointed out that the potential inflation index favored by the Federal Reserve rose at the fastest rate in nearly a year in January, supporting policymakers to adopt a cautious interest rate cut strategy.
Data released on Thursday showed a slight decline in inflation-adjusted consumer spending in January after a strong holiday shopping season. As the main support for expenditure, there has been little change in actual disposable income.
The US federal government shutdown crisis has been temporarily postponed. As this week comes to an end, US congressional leaders have once again reached an agreement to avoid a partial government shutdown and reach an agreement on 6 of the 12 funding bills that have been put on hold for several months.
According to the new agreement, some federal agencies (including the US Department of Commerce, the Department of Energy, and the Department of Justice) will receive temporary funding until March 8, while the remaining agencies (including the US Department of Defense and Homeland Security) will maintain funding until March 22. The previous deadlines were March 1 and March 8.
The House and Senate are scheduled to vote on the latest ongoing resolution this week. Meanwhile, lawmakers will work to resolve the details of the approximately $1.6 trillion federal spending plan.
Individual stocks in focus
Most star tech stocks rose, with Nvidia up more than 2%, Tesla and Google about 1%, and Microsoft, Amazon, and Meta rising slightly.
Most popular Chinese securities rose. Xiaopeng rose nearly 10%, NIO rose more than 5%, Pinduoduo and JD rose more than 1%, Ideal rose 1%, and Alibaba rose slightly.
The trend of digital currency concept stocks diverged. MicroStrategy rose about 6%, Coinbase rose more than 2%, Bit Brother rose slightly, Marathon Digital and CleanSpark fell more than 6%, and Riot Platforms fell about 4%.
In terms of individual stocks,$Snowflake (SNOW.US)$It fell nearly 20%, and the guidance for the next fiscal quarter fell short of expectations, and the CEO announced his departure.
$C3.ai (AI.US)$The increase was nearly 20%. The financial report for the third fiscal quarter exceeded expectations, and the full-year revenue guidance was raised.
$Okta (OKTA.US)$It rose more than 27%, and the adjusted net profit for Q4 greatly exceeded expectations.
“America's New East”$Duolingo (DUOL.US)$It rose nearly 20%, and the Q4 earnings report exceeded expectations.
editor/tolk