Sina US Stock News In the early morning of the 11th Beijing time, the US stock market closed down sharply on Wednesday, with technology stocks leading the decline. The Dow fell more than 830 points. The US bond yield rose rapidly and remained at the highest level for many years, which worried investors.
At 16:00 on October 10 (Beijing time at 04:00 on October 11), the Dow fell 831.83 points, or 3.15%, to 25598.74 points; The S&P 500 index fell 94.66 points, or 3.29%, to 2785.68; The Nasdaq Composite Index fell 315.97 points, or 4.08%, to 7422.05.
The S&P 500 index fell below its 50 day moving average. The Dow fell as low as 25593.65.
NASDAQ fell 4.08%, and large technology stocks generally declined. Tesla It ended 2.25% lower Twitter Down 8.47% Amazon Down 6.15% Microsoft It closed down 5.43% Google Alphabet, the parent company of Apple Closed 4.63% lower, Facebook It ended 4.13% lower.
Scott Minerd, an analyst at Guggenheim Partners, a securities firm, described the performance of US stocks today as "the Titanic hit an iceberg". He warned that the upcoming interest rate increase by the Federal Reserve and the financial deficit caused by the Trump government's reduction of corporate taxes would form a set of "combination fists" to subvert the bull market of US stocks.
He wrote on Twitter: "Just like the full speed Titanic is about to hit an iceberg lurking in the darkness in the distance, the US economy is making every effort to raise interest rates to control inflation and overheating of the labor market, and it is approaching the remote fiscal dilemma in 2020."
Larry Benedict, CEO of Opportunistic Trader, a securities firm, said: "People have sold off the previous leading stocks in the technology industry. I think many investors have not taken adequate hedge protection, and the future will be more painful."
Recently, US stock trading has been affected by the rise in US treasury bond yields and interest rate hikes. Both indicate that the long-term period of ultra-low interest rates is coming to an end, and the US stock market may have entered a new stage after the crisis.
The increase of treasury bond yield means that the borrowing costs of enterprises and investors increase, and will urge investors to reassess the value of stocks. However, the increase in treasury bond yields also reflects the economic situation of the United States.
On Wednesday, the yield of 10-year US government bonds climbed 1.8 basis points to 3.23%, close to the highest level since 2011.
Bank of America Terry Sandven, chief stock market strategist of US Bank Wealth Management, said: "Due to the rise of treasury bond yield and the general improvement of investment difficulty, the market sentiment is mixed. The treasury bond yield affects people's hearts, and the trade policy has not yet made progress. The mid-term election is less than a month old. With the increase of yield, national debt has become a more feasible investment object that can replace stocks. "
Financial report and economic data
At the same time, investors are also waiting for the third quarter financial reports of American listed companies. Later this week, several large financial institutions will announce their financial reports, which will unofficially kick off the US stock earnings season. Generally speaking, the market expects that the earnings of American enterprises will continue to grow, providing support for the value of the stock market. However, some people worry that the value of US stocks is already too high, and the performance of US stocks in the earnings season may disappoint people.
Citigroup (C) and Wells Fargo Bank (WFC) will release its financial report later this week. On the whole, analysts surveyed by FactSet expect that the earnings of listed companies in the third quarter will increase by 19% year on year.
But B Art Hogan, chief market strategist of Riley FBR, said: "Many people are worried that the upstream costs of enterprises will increase. Many enterprises have mentioned their concerns about the strengthening of the US dollar and trade wars in their performance guidelines, which are not good."
On the economic data side, the producer price index (PPI) rose 0.2% month on month in September, in line with expectations, reversing the unexpected decline in August; The year-on-year growth was 2.6%, which was lower than expected and the previous value.
In the sub index of PPI index, the rise in service prices offset the slight decline in commodity prices. The service cost rose 0.3%, reversing the downward trend of the previous two months. More than one-third of the service growth was attributed to the growth of air passenger services; Commodity prices fell slightly for the first time since May 2017.
Speech by Federal Reserve officials
Federal Reserve officials' speech attracted market attention. Federal Reserve officials who spoke today include Charles Evans, the governor of the Chicago Federal Reserve, and others. Evans said in his speech: between neutral interest rates, the Federal Reserve still has room to raise interest rates; After the interest rate reaches 3%, the Federal Reserve may stop raising interest rates.
Evans said that the growth of the US economy will further drive down the unemployment rate, and it is expected that inflation will rise 0.1% from the current level of 2%.
He said: The neutral interest rate is expected to be about 2.75%, and the interest rate slightly higher than this level is a slightly tight monetary policy. This will allow the unemployment rate to gradually rise to a more sustainable level; As long as inflation remains at around 2% and the economy performs well, the Federal Reserve may stop raising interest rates after the interest rate reaches 3%.
US President Trump reiterated his dissatisfaction with the Federal Reserve's policy on Tuesday, saying that the central bank "does not need to raise interest rates too quickly". The Federal Reserve has raised interest rates three times this year and hinted that it would raise interest rates again in December.
Rob Kaplan, the governor of Dallas Federal Reserve, said on Tuesday night that he believed that inflation pressure was increasing, but estimated that prices would not rise suddenly. He also said that there is a risk of rising oil prices in the next few years.
Investors have been monitoring the recent rise in oil prices. Year to date crude oil Futures prices have risen by 24%, and the current oil price is at the highest level since 2014. In an interview with the media, the Executive Director of the International Energy Agency (IEA) warned that oil prices had entered the "warning zone".
International trade policies continue to receive attention. Steven Mnuchin, the US Treasury Secretary, warned against the competitive devaluation of emerging market currencies, but did not attack the deliberate devaluation of the exchange rate.
Focus on individual stocks
Pershing Square Capital Management LP, a well-known hedge fund investor William Ackman, announced that it has Starbucks (SBUX) 15.2 million shares, accounting for about 1.1% of the company's shares, valued at about 900 million US dollars based on the current share price. Starbucks closed down nearly 3%.
According to the Wall Street Journal, Sears Holdings (SHLD) has hired M-III Partners LLC to assist it in preparing to file its bankruptcy application this week.
Mark Kalinowski, president of Kalinowski Equity Research, estimates that Papa John's International (PZZA), a pizza chain in poor condition, may be acquired next year. According to media reports, Trian, a hedge fund led by Nelson Peltz, an activist investor, is evaluating its bid for the pizza chain.
Listed in the United States Wei Lai The share price of automobile (NIO) climbed. According to foreign media reports, the British investment management company Baillie Gifford, which holds 9% of the shares of Tesla (TSLA), disclosed in a regulatory document on Tuesday that it has held 85.3 million shares of Weilai Automobile, equivalent to 11.4% of the shares. Weilai Auto closed 4.87% higher.
Other market performance
Asian markets were mixed on Wednesday, while Chinese stocks ended slightly higher. In terms of European stock markets, the Pan European 300 Index ended 1.43% lower, the FTSE 100 Index of Britain ended 1.1% lower, the DAX Index of Germany ended 2.0% lower, the CAC Index of France ended 2.0% lower, and the IBEX Index of Spain ended 0.5% lower.
Gold futures for December delivery on the New York Mercantile Exchange rose 1.9 dollars, or 0.2%, to close at 1193.40 dollars/ounce. Delivered in December silver Futures fell 7.4 cents, or 0.5%, to US $14.326/ounce.
West Texas Intermediate Crude Oil (WTI) futures for November delivery on the New York Mercantile Exchange fell $1.79, or 2.4%, to close at $73.17 per barrel, the lowest closing price since September 27.
London as the benchmark of global oil price Intercontinental Exchange (ICE) The price of Brent crude oil futures in December fell by $1.91, or nearly 2.3%, to close at $83.09 per barrel.
ICE USD Index It fell 0.2% to 95.46. The yield of 10-year US government bonds rose nearly 3 basis points to 3.237%.
Editor in charge: Zhang Jun SF065
