On the evening of the 3rd, Beijing time, the US ADP employment data for March exceeded expectations and recorded the biggest increase since July 2023, once again confirming that the US economy is still strengthening, causing the market to lower its bet on the Fed's interest rate cut. The Atlanta Federal Reserve Governor expects to cut interest rates only once this year, which could happen in the fourth quarter.
As of press release, the three major indices have collectively declined. The S&P 500 index fell 0.03%, the Nasdaq Composite Index fell 0.26%, and the Dow Jones index fell 0.04%.
Traders further lowered their bets on the Federal Reserve's interest rate cuts in June and this year, causing US Treasury yields to rise. The 10-year Treasury yield surpassed 4.4% and hit the highest level since November last year.
In terms of economic data on Wednesday, the US ADP private employment agency reported that ADP employment increased by 184,000 in March. Expected 148,000, previous value 140,000.
ADP employment in March was higher than the 155,000 estimated by analysts in the Dow Jones survey, marking the fastest growth rate since July 2023.
ADP employment data shows that the number of new employees added by private US companies exceeded economists' forecasts in March, which is another sign that the economy continues to strengthen.
Tom Lee, co-founder and head of research at Fundstrat Global Advisors, said that as the pace of inflation continues to slow, the Federal Reserve is still preparing to cut interest rates for the first time in June. Lee was one of the few bulls on Wall Street last year, and he accurately predicted the upward trend of US stocks in 2023 at the end of 2022.
He cited the latest inflation indicators as evidence that economic prices are cooling, and pointed out three dovish signs, including: the Federal Reserve's preferred inflation index rose 2.8% year on year in February, the lowest increase in three years; consumer inflation expectations are also “declining,” and the median 1-year inflation forecast for February remained around 3%; and France's core inflation data is a sign that inflation in most economies may cool down.
Federal Reserve Bank of Atlanta Governor Raphael Bostic (Raphael Bostic) said on Wednesday that he expects only one rate cut this year, which could happen in the fourth quarter.
Bostic was one of several central bank officials speaking to media and events across the US on Wednesday.
Federal Reserve Chairman Powell, Federal Reserve Vice Chairman Michael Barr (Michael Barr), Federal Reserve Governor Michelle Bowman (Michelle Bowman), Federal Reserve Governor Adriana Kugler (Adriana Kugler), and Chicago Federal Reserve Chairman Austin Goolsbee (Austan Goolsbee) will also speak on Wednesday.
This week, the market will focus on Friday's March non-farm payrolls data to gain a deeper understanding of the labor market situation.
If the non-farm payrolls data is strong, investors may further lower their expectations for the Federal Reserve's easing policy.
Individual stocks in focus
Most Star Technology stocks fell. Intel fell more than 6%, Google fell nearly 1%, Nvidia, Microsoft, Amazon, etc. followed suit, and Meta rose by nearly 1% against the market.
Popular Chinese securities generally fell. Ideal Auto and Xiaopeng Motors fell more than 3%, JD and NIO fell nearly 2%, and Ali and Pinduoduo followed suit.
Cyclical stocks generally rose. Alcoa rose more than 3%, Southern Copper rose more than 2%, and McMoRan Copper and Gold rose nearly 2%.
$Tesla (TSLA.US)$It fell nearly 1% and fell nearly 5% on the previous trading day. According to news, Tesla's global electric vehicle deliveries fell nearly 9% year on year in the first quarter of this year, the first decline in quarterly deliveries in nearly 4 years.
$Intel (INTC.US)$It fell nearly 7%. According to foreign media reports, the revenue of Intel's foundry business in 2023 was 18.9 billion US dollars, and operating losses were 7 billion US dollars.
Editor/Somer