Breakfast | Hawkish Comments from the Fed Chairman Scare US Stocks, NIO Phone May be Released Today
The Nasdaq 100 fell below the 15,000 point mark, while the S&P pressured the 4,400 integer level, and popular Chinese concept stocks continued to decline for two consecutive days in the US stock market. The Federal Reserve significantly raised its economic growth forecast for this year. The deadlock in the major US automakers' strike continues, with over 2,000 workers being laid off by two car companies. Media reports suggest that Apple and Goldman Sachs have temporarily suspended the development of stock trading functionality for the iPhone.
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Market: Overnight and this morning's market
Surprising Hawkish Dot Plot, Nasdaq Deepens Decline
As expected, the Federal Reserve kept the benchmark interest rate unchanged at the highest level in 22 years, ranging from 5.25% to 5.50%. However, the surprising hawkish dot plot suggests another rate hike later this year, with the number of rate cuts in 2023 potentially halved to two times. The rate expectations for 2025 and beyond have also increased. Powell stated that they are prepared to raise rates again when appropriate.
US stocks have fallen for two consecutive days, reaching the lowest level in nearly four weeks. The Nasdaq 100 fell below the 15,000-point mark, while the S&P and Nasdaq hit their lowest levels since August 24. The S&P is approaching the 4,400-point level, and small-cap stocks in the Russell 2000 index have fallen for four consecutive days.
Technology, semiconductor, AI, and banking stocks all experienced an expanded decline in the final trading session. Meta fell by 1.8%, Tesla by 1.5%, Apple by 2%, Amazon by 1.7%, Microsoft by 2.4%, Netflix by 2.5%, and Google A by over 3%. Intel fell by 4.5%, AMD by over 1%, NVIDIA by 3%, and Arm by over 4%, all falling for four consecutive days. Instacart fell below its US IPO price of $30, dropping by 10.6%.
Chinese concept stocks have been following the overall decline of US stocks for two consecutive days. JD.com and Baidu fell by approximately 1%, while Pinduoduo fell by around 4%. Alibaba fell by 1.6%, Bilibili by 1.5%, Tencent ADR by 0.6%, NIO rose by over 3%, Li Auto rose by 0.5%, and XPeng Auto fell by 6.5%.
What happened to blue-chip stocks and hot stocks
Amazon's Most Important Event of the Year
Alexa provides ChatGPT-like conversational interaction, creating "human-like interactions" with users. New hardware such as speakers, tablets, and routers were unveiled.
Media: NIO's First Smartphone to be Released This Morning
NIO will hold its Tech Innovation Day today, introducing its full-stack technology layout and launching new mobile internet products.
Boeing Raises China's Future 20-Year Aircraft Demand Expectations
It is estimated that Chinese airlines will need 8,560 new commercial aircraft, higher than last year's forecast of 8,485.
Microsoft's Acquisition of Activision Blizzard Faces Final Obstacle Next Week
Insiders revealed that the UK antitrust regulator is expected to make a decision on Microsoft's $69 billion acquisition of Activision Blizzard next week, with the final decision to be made on October 18.
FedEx Exceeds Expectations in Performance
FedEx reported earnings per share of $4.23 for the first quarter of fiscal year 2024, surpassing the expected $3.6. The revenue was $21.7 billion, slightly below the expected $21.81 billion. Net profit of 1.08 billion US dollars, expected 899 million US dollars. The adjusted earnings per share for the full year are expected to be 17-18.5 US dollars, previously forecasted at 16.5-18.5 US dollars. It is expected to repurchase 1.5 billion US dollars of stocks in the 2024 fiscal year. After-hours trading rose more than 4%.
Huawei has released the new architecture Ascend AI computing cluster Atlas 900 SuperCluster, which supports training large models with trillions of parameters.
Macro: Taking you around the world
Most policymakers believe that raising rates again this year is more likely to be appropriate, and Powell believes that the Fed is very close to the interest rate target. Powell emphasized that a soft landing is the primary goal of the FOMC, but the Fed will not regard a soft landing as the base expectation.
How does Wall Street view the Fed meeting?
Confusing, the Fed lacks the impetus to turn dovish, and rate hikes this year are not without worries.
The Hong Kong Monetary Authority keeps the benchmark interest rate unchanged at 5.75%.
The Fed significantly raised its economic growth forecast for this year.
The Fed's FOMC economic projections show that the median GDP growth forecasts for the end of 2023 to 2025 are 2.1%, 1.5%, and 1.8%, respectively (compared to the June projections of 1.0%, 1.1%, and 1.8%).
The probability of the Fed keeping rates unchanged in November is 70.6%.
According to CME "FedWatch": The probability of the Fed keeping rates unchanged in November within the range of 5.25%-5.50% is 70.6%, and the probability of a 25 basis point rate hike to the range of 5.50%-5.75% is 29.4%.
US auto industry strike deadlock continues, two automakers lay off over 2,000 workers
General Motors and Stellantis have announced that they have laid off more workers due to the consequences of the strike related to the United Auto Workers (UAW).
Guangzhou relaxes property purchase restrictions, VAT "5 to 2", first relaxation of purchase restrictions in first-tier cities.
China's central bank and three other departments respond to China's economic situation
Director of the Monetary Policy Department: There is still sufficient policy space for monetary policy to respond to unexpected challenges and changes. The exchange rate of the RMB against a basket of currencies can more comprehensively reflect changes in the value of the currency. China's economy does not experience deflation, and there will be no deflation in the future. The pessimistic view of China has never materialized.
Japanese chip manufacturer Kamen Rider is considering reducing its workforce to support the company's transformation.
The Tokyo Stock Exchange announced that trading hours will be extended.
Starting from November 5, 2024, the closing time for on-market bidding will be extended from 3:00 p.m. local time to 3:30 p.m.