Topic: How will A-shares be interpreted after the big opening and closing?
In the early morning of the 18th Beijing time, US stocks closed lower on Wednesday. The S&P 500 index and the Nasdaq index recorded their fourth consecutive decline. Nvidia fell nearly 4%. The market continued to pay attention to the US stock financial report and the monetary policy prospect of the Federal Reserve. The Beige Book of the Federal Reserve said that the economy expanded slightly, but the difficulty for enterprises to pass on costs increased significantly.
The Dow fell 45.66 points, or 0.12%, to 37753.31; The Nasdaq Composite Index fell 181.88 points, or 1.15%, to 15683.37; The S&P 500 index fell 29.20 points, or 0.58%, to 5022.21.
The financial report is still the focus of the market. So far, less than 10% of S&P 500 index companies have released financial reports, but three quarters of them have exceeded Wall Street's expectations.
Shares of United Airlines soared by more than 17% after the company announced that its losses were narrower than expected and its revenue exceeded expectations.
J. B. Hunt Transportation Services fell 8.1%, and its revenue and profit fell short of analysts' expectations.
Barclays strategists believe that the earnings report of the US stock market will be the main factor driving the stock price up, and they suggest buying on bargain hunting, because the economic activity data continues to show that the economic recovery may boost profits.
The market is also paying attention to the path of the Federal Reserve to cut interest rates this year.
The Beige Book report on the economic climate of the Federal Reserve announced on Wednesday said that the US economy expanded slightly, but the difficulty of enterprises to pass on costs increased significantly.
The Beige Book report compiled by the Federal Reserve after investigating its regional business contacts indicates that the US economy has "slightly expanded" since late February, making it more difficult for enterprises to report the rising costs.
"Consumer spending has barely increased in general, but the reports of various regions and expenditure categories are very different," said the Beige Book report released on Wednesday. "Several reports mentioned that discretionary spending is weak, and consumers are still very sensitive to prices."
"Another frequent comment is that in recent months, the ability of enterprises to pass on rising costs to consumers has significantly weakened, leading to a decline in profit margins," the Beige Book said.
The latest issue of the Beige Book was compiled by the Boston Federal Reserve Bank based on information collected on and before April 8. The report includes data and comments on business conditions in 12 Federal Reserve jurisdictions.
The New York Federal Reserve predicted on Wednesday that the Federal Reserve may stop shrinking its balance sheet in 2025. According to the two scenarios predicted by the Federal Reserve of New York in its annual report, the Federal Reserve may end the scale reduction in the middle or beginning of 2025, and the bank reserve balance will fall to about 2.5 trillion or 3 trillion dollars in the next year.
At the policy meeting last month, Federal Reserve officials began to discuss slowing down and shrinking the balance sheet, but no decision was made at the meeting.
Under the scenario of "more reserves" described in the report of the New York Federal Reserve, the size of the balance sheet will be reduced to about 6.5 trillion dollars, while under the scenario of "less reserves", the size of the balance sheet will be reduced to 6 trillion dollars.
On Tuesday, Jerome Powell, chairman of the Federal Reserve, made the market lower its bet on cutting interest rates this year.
Powell said that the recent inflation data showed that it might take longer for the central bank to have enough confidence in cutting interest rates. He pointed out that since the inflation rate dropped rapidly at the end of last year, the Federal Reserve has not made more progress in combating inflation. If price pressures continue, the Federal Reserve can keep interest rates unchanged "for a necessary long time".
Philip Jefferson, Vice Chairman of the Federal Reserve, said on Tuesday that he expected inflation to continue to decline as the Federal Reserve continued to implement restrictive policies. He said: "The inflation outlook is still quite uncertain. If the upcoming data shows that inflation is more lasting than I currently expect, it will be appropriate to maintain the current restrictive policy stance for a longer period of time."
The above comments of the Federal Reserve officials show that after the important CPI inflation indicator exceeded expectations for the third consecutive month, the views of the Federal Reserve officials on the interest rate path changed.
At the beginning of this year, the market expected the Federal Reserve to cut interest rates as many as six times in 2024, with a total of 1.5 percentage points. But now traders doubt whether the Federal Reserve will cut interest rates by 0.5% this year. The market's expectation of the Federal Reserve's interest rate cut - which has fallen sharply in the past two weeks - fell further after Powell's comments on inflation.
The market has significantly lowered its expectation of the number of interest rate cuts in the United States this year. At present, it is predicted to be less than twice, which is a far cry from the six interest rate cuts expected at the beginning of the year. The first interest rate cut is expected to continue in September, although the market's confidence in it has declined.
UBS The company said on Wednesday that the Federal Reserve will be forced to cut interest rates this year, and it is expected that by the end of this year, the yield of US 10-year treasury bonds will eventually fall below 4%. The company said that the Federal Reserve will eventually have to loosen monetary policy, although Federal Reserve Chairman Powell warned on Tuesday that interest rates may remain at a higher level for a longer time.
UBS analyst Solita Marcelli wrote in a report on Wednesday: "We believe that because the interest rate cut has been postponed rather than cancelled, we still expect the yield of 10-year US treasury bonds to fall to about 3.85% by the end of the year, lower than the current 4.66%."
Marcelli said: "Although we recently lowered our expectation on the time and extent of the Federal Reserve's interest rate cut, we believe that the US Central Bank will still cut interest rates twice this year, most likely starting from the September meeting. This means that the return prospect of high-quality bonds is still positive and attractive, while the recent loss of fixed income products may be temporary."
But Citibank predicts that the Federal Reserve will still cut interest rates five times this year.
Economists at Citigroup are taking a risk to bet that almost everyone on Wall Street is wrong about the path of the Federal Reserve's interest rate.
After three consecutive months of slightly higher than expected inflation data, Bank of America 、 Goldman Sachs Group Morgan Stanley Rivals with other banks have lowered their expectations for interest rate cuts this year. Federal Reserve Chairman Powell expressed support for these measures on Tuesday, saying that policy makers are not in a hurry to ease policy.
However, Andrew Hollenhorst and Veronica Clark of Citigroup said that it was wrong to make a hasty judgment because the Federal Reserve was still worried that the unexpectedly strong momentum of economic growth might stagnate. Therefore, the two analysts maintained their expectation of the Federal Reserve's interest rate cut this year, saying that policymakers were eager to catch any signs of slowing inflation or economic weakness.
Ross Mayfield, an investment strategy analyst at Baird, said that the Fed officials' speech on Tuesday added to the pessimistic sentiment of the market. He said that in the short term, most stock market transactions fluctuate from range to range, but any geopolitical event will further increase oil prices.
He said: "The main negative factor is that the pricing of the Federal Reserve's monetary policy expectations is again biased towards hawks. I think Federal Reserve Chairman Powell did not take too many measures today to alleviate these concerns, which may be intentional. The market is questioning whether interest rates will be cut in 2024."
Alexandre Marquis, senior portfolio manager of asset management company Unigestion, said that tensions between Iran and Israel also restricted high-risk bets. He said that the market has digested the prospect of lower interest rate cuts than previously expected.
"Part of the disappointment has been reflected in the price, and we have seen a recent correction in the past few days," he said
Tension in the Middle East continues to fester. Israel is considering responding to Iran's first attack on Israel, a Jewish state. Saudi Arabia and the United Arab Emirates issued an unusually frank joint statement on Wednesday, calling for maximum "self-restraint" and "freedom from the danger of war and its terrible consequences" in the region.
Focus stocks
Nvidia has recently added two entry-level products of Ampere architecture to its workstation professional visualization GPU: RTX A400 and RTX A1000, introducing Tensor Core and RT Core into the desktop low-end professional graphics card product line for the first time.
Tesla The company will again let shareholders vote on the compensation plan of CEO Mask. Previously, a Delaware court announced that the $56 billion bonus arranged by Tesla for Mask in 2018 was invalid.
Tesla also said in the proxy document released on Wednesday that it would vote to move the company's registered place from Delaware to Texas. The electric car manufacturer will hold its annual shareholders' meeting on June 13.
Tesla Chairman Robin Danholm criticized the Delaware Equity Court's ruling in January. She said that it was equivalent to an afterthought guess on the shareholders who approved Mask's salary. Katherine McCormick, a justice of the Delaware Equity Court, described the directors of the company as "lazy servants of arrogant masters" and said they did not consider the best interests of investors.
AMD The Reelung AMD Ryzen Pro 8040 series and AMD Ryzen Pro 8000 series were released to support the most advanced x86 processors in the AI computer field. Equipped with NPU unit, supporting WiFi 7. Among them, the Ruilong Pro 8040 series is suitable for notebooks, and the Ruilong Pro 8000 series is suitable for desktops. Both of these two series use the 4nm process technology.
Maxim gives Apple Initial rating held, with a target price of $178.
Apple CEO Tim Cook visited Indonesia on the 17th and said that Apple would consider establishing a manufacturing plant in Indonesia. It is reported that Cook met with Indonesian President Joko and several ministers and other dignitaries in Jakarta on the same day to discuss Apple's investment plan in Indonesia.
Cook said at the press conference after the meeting that the President of Indonesia talked about the vision of developing manufacturing in Indonesia, which is also something Apple will consider.
Budi, Minister of Communications and Information of Indonesia- Ali -Satyadi said that, Microsoft CEO Nadella will visit Indonesia at the end of this month.
It is reported that Japan plans to legislate to regulate the control of technology giant enterprises on the mobile application market, aiming to establish a regulatory system similar to that in Europe, prohibit specific acts, and impose fines equivalent to 20% or more of sales on violations.
The bill will prevent Apple and Google Such large platform operators block third-party application stores and payment systems, as well as other regulations on gatekeeping practices, hoping to promote competition between markets and allow consumers to access various applications at lower prices.
Amazon Cloud Technology announced that it officially launched Claude 3 Opus model from Anthropolic on Amazon Bedlock. This model is the most intelligent model in the Claude 3 family. It has outstanding performance in highly complex tasks, amazing fluency and human like understanding, and can effectively deal with open prompts and unknown new scenes.
Citigroup published a research report that, due to the continuous improvement of participation, it will increase the tracking of the advertising volume of Instagram Reels in the first quarter by 90 basis points to 20% quarterly. According to SenorTower data, the number of daily active users of each application spending minutes on Instagram in the first quarter increased by 4% year on year.
Citi Meta Platforms was listed as the first stock in the industry, and its target price was raised from $525 to $590, maintaining the "buy" rating.
U.S.A uco bank The company cut its 2024 net interest income outlook.
Asmar's net sales in the first fiscal quarter, new orders and sales guidance in the second fiscal quarter all fell short of expectations.
The US Federal Trade Commission (FTC) is preparing to file a lawsuit to prevent Coach's parent company Tapestry from acquiring Capri Holdings.
In other markets, the price of gold futures for June delivery on the New York Mercantile Exchange fell 0.8% to close at 2388.4 dollars per ounce on Wednesday.
US WTI crude oil futures closed down more than 3% on Wednesday, the third consecutive trading day of decline. West Texas Intermediate Crude Oil (WTI) futures for May delivery on the New York Mercantile Exchange fell by 2.67 dollars, or 3.13%, to close at 82.69 dollars per barrel.
Europe Intercontinental Exchange Brent crude oil futures for June delivery fell by 2.73 dollars, or 3.03%, to close at 87.29 dollars per barrel.
So far this week, WTI crude oil in the United States and Brent crude oil futures, the benchmark of global crude oil prices, both fell by more than 3.4%.
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