Source: China Fund News
On Tuesday, January 11, Eastern time, Powell was re-elected chairman of the Federal Reserve to attend the hearing, reiterating the Fed's willingness to curb high inflation, in line with market expectations, the tone is even dovish, the three major U.S. stock indexes opened low and went high, staged a V-shaped rebound, intraday reversal, and the US Treasury yield fell in a large area.
Crude oil hit its biggest gain in five weeks and a new two-month high, with gold gaining its biggest gain in more than three weeks.
On the intraday, leading technology stocks have closed higher; many Chinese stocks continue to perform well; banks will usher in a bright earnings season, and financial stocks have risen.
Tesla has finally "bought the mine" as it wishes! Lock in a 75,000-tonne high-grade nickel mine in advance, and the deal is worth more than $1.5 billion (nearly 10 billion yuan) at current nickel prices.
The "new debt king" and billionaire Jeffrey Gundlach has made the latest statement, saying that inflation is likely to exceed new highs, and the US economy will be weaker in the future.
Powell reiterated the Fed's willingness to curb high inflation
It said that there would be more rate hikes if needed
On January 11, local time, the US Senate Banking Committee held a hearing on the nomination of Powell for re-election as the chairman of the Federal Reserve, which is Powell's first public appearance this year, and the market is highly concerned about his statement on the future monetary policy, and believes that he will reiterate the tone of the minutes of the Fed's December FOMC meeting, that is, this year's interest rate hikes and balance sheet reductions may be carried out earlier and faster.
In addition, in response to the Fed's most drastic monetary policy sharp turn in decades, the market widely expected that Powell will inevitably be severely tortured by the Senate, which has frightened investors and fueled market volatility at the beginning of the new year.
In response to the rate hike, Powell said, "If we have to raise rates more, we will do that."
According to media information, Powell gave a roadmap for the normalization of US monetary policy this year at the hearing: net asset purchases will end in March, interest rates will be raised this year, and may begin to shrink the balance sheet later this year. If the recovery progresses as expected, the Fed is ready to move quickly.
He also said the rapidly recovering labor market, unemployment near a 50-year low and inflation well above 2 percent are telling the Fed that the U.S. economy no longer needs or wants to develop over-the-top leniency policies to deal with the pandemic and its consequences.
In addition, he expressed concern about high inflation, stressing that the Fed has the determination to take the necessary measures to control price increases:
"If we see inflation persisting longer than expected at high levels, high inflation is likely to persist into mid-2022, and if inflationary pressures persist, the Fed will continue to adjust its policies."
For the job market, according to the previously released hearing speech and Powell's speech, the Fed is firmly committed to achieving the statutory goal of maximizing employment and price stability, and high inflation poses a serious threat to maximizing employment, so removing some of the easing support can curb the supply-demand imbalance.
Powell did not specify when the market would start the first post-pandemic rate hike, adding that the Fed had not yet made any decision to cut and would continue discussions at the January FOMC meeting.
Powell said the Fed tends to hold 2 to 4 FOMC meetings to deal with the details of the balance sheet reduction and "can provide clearer forward guidance in future meetings" and that the $9 trillion balance sheet is "well above what it needs to achieve."
In addition, Powell also mentioned that after the interest rate hike and balance sheet reduction are opened, the US monetary policy will still adopt a broad and forward-looking view, keep pace with the evolving economy, and will maintain moderate easing rather than excessive tightening that causes recessions.
In addition, on Wednesday, the United States will release December CPI inflation data, and the market is expected to increase by 7% year-on-year, which will continue to maintain the highest level in nearly 40 years.
The three major stock indexes opened low and went high
The S&P ends five consecutive declines The NASDAQ soared
Affected by Powell's relatively dovish statement and in line with expectations, the three major U.S. stock indexes collectively opened low and went high, staged a V-shaped rally after the opening, and finally, the three major stock indexes closed collectively for the first time in the past six trading days.
As of the close, the Dow closed up 183.15 points, or 0.51%, at 36,252.02 points; the Nasdaq closed up 1.41 percent at 15,153.45 points, a new high since Tuesday's close, up two days in a row; and the S&P 500 closed up 0.92 percent at 4713.07 points, ending a five-day streak and getting rid of a nearly one-month trough.
In addition, the NASDAQ-100 index closed up 1.47% at 15644.12 points. Among the constituent stocks, Illumina (ILMN), a biotechnology company that announced higher-than-market revenue guidance for this year and emphasized strong demand for its gene sequencing solutions, led the gains, closing up about 17%; Chinese JD.com rose more than 10% and Pinduoduo rose 5.23%.
Musk finally got his wish
Tesla spends a lot of money to "buy mines"
Comprehensive foreign media reports, after being "pigeon-released" many times, Tesla finally reached an agreement with Talon, a base metal manufacturer listed in Toronto. Talon will supply Tesla with a nickel concentrate from Tamarack Nickel Project in Minnesota, owned by Talon.
It is understood that the term of the agreement is 6 years, and Tesla has committed to purchasing 75,000 tons (165 million pounds) of nickel concentrate from the Tamarack nickel project. According to foreign media estimates, if the current nickel price is evaluated, the transaction nominally exceeds $1.5 billion.
Talon and mining group Rio Tinto jointly own the Tamarack nickel project in Minnesota. Tamarack is currently the only high-grade nickel project in the U.S. that is under development. According to the disclosure, Talon currently owns a 51% interest in the Tamarack nickel project.
Like lithium and cobalt, nickel is also one of the important raw materials for the production of power batteries, mainly used in ternary material batteries. The main role of nickel in the battery is to improve the energy density, which is reflected in the new energy vehicle, that is, the endurance is enhanced. In recent years, in order to take into account the improvement of battery capacity and the reduction of battery costs, the high nickelization of ternary materials has become a major trend.
In recent years, Tesla has raised its purchase of nickel several times, and CEO Musk has repeatedly expressed concerns about future nickel supply.
On February 25, 2021, Musk said on Twitter that nickel is Tesla's biggest concern about expanding lithium battery production, and hinted that "nickel shortage" has led Tesla to use lithium iron phosphate battery routes on a large scale.
Musk also shouted to the mining industry on Tesla's second-quarter 2020 earnings call: If you mine nickel efficiently in an environmentally friendly way, Tesla will give you a long-term contract. During Tesla Battery Day in 2020, Musk said he would maximize the use of nickel and reduce cobalt to zero.
In October 2021, Prony Resources, a New Caledonia-based mining company, announced that it had reached an agreement with Tesla to become Tesla's main nickel supplier, from which tesla would buy about 42,000 tons of nickel.
In July 2021, Australian mining giant BHP Billiton announced that it had signed a nickel supply agreement with Tesla, and BHP Billiton's Western Nickel West would provide Tesla with nickel as a raw material for battery manufacturing, but did not disclose more details of the cooperation.
Although Tesla can "throw money" to buy mines, the lessons of the past show that if the mining link is not low-carbon and environmentally friendly, even Tesla will be pigeons released by suppliers.
In August, U.S.-listed Piedmont Lithium announced that it would delay the delivery of the first lithium concentrate to Tesla, uncertain how long it would. In September 2020, Piedmont Lithium announced a five-year agreement with Tesla to become Tesla's lithium concentrate supplier.
As of the close, Tesla closed at $1064.4 per share, up 0.59%, with a total market value of $1.07 trillion.
Leading technology stocks are strong
Rise one after another
Leading tech stocks all closed higher, led by Amazon up 2.4 percent, Apple up nearly 1.7 percent, Google parent Alphabet up nearly 0.8 percent, Microsoft up more than 0.2 percent and Netflix up nearly 0.2 percent.
Meta rose nearly 2 percent, meta announced the appointment of "American version of Hungry" CEO Tony Xu as a board member, the other directors remained unchanged, that is, the board of directors expanded to 10 people; in addition, Facebook asked the U.S. judge to eliminate the U.S. Federal Trade Commission (FTC) antitrust lawsuit against it, but the motion was rejected by the judge.
U.S. Treasury yields fell in a large area
The "new debt king" spoke again
The three-year Treasury yield fell 1.82% to 1.178% and the 10-year Treasury yield fell 1.89% to 1.746%.
In addition, after the close, jeffrey Gundlach, the "new debt king" of the United States and billionaire, has the latest statement, saying that inflation is likely to exceed 7% to a new high. He also said the Treasury yield curve suggests that "the U.S. economy will be weaker in the future" and that the Fed will follow the message released by the two-year Treasury yield (on monetary policy issues).
Crude oil and gold both recorded the largest gains
Crude oil hit its biggest gain in five weeks and a new two-month high, with U.S. oil rising more than 4% to break through $80 in the session. Gold hit its biggest gain in more than three weeks, closing at $1,800 for the first time in four days.
Chinese stocks performed well
Most outperformed the broader market
JD.com closed up more than 10%, outstanding performance in Chinese stocks; Didi rose 9.13%; Qutoutiao rose more than 15%, Monster Charging rose more than 14%, Tuniu rose more than 13%, Ideal Automobile rose more than 8.2%, Shell rose more than 8%, New Oriental and Xiaopeng Automobile rose more than 7.3%, Weilai rose more than 3.8%, Xunlei and NetEase Youdao rose more than 3.7%, Weibo rose more than 3.6%, Baidu rose more than 2.8%, Leju and Good Future rose more than 2.4%, And Bilibili rose more than 2.3%.
Bank stocks will see an eye-catching earnings season
Large bank stocks are generally rising
A new U.S. earnings season kicked off this week. Led by JPMorgan Chase, Citi and other large bank stocks, investors may once again usher in a bright earnings season. Among them, in the context of economic rebound and improved demand, the energy sector is expected to achieve more than expected profits. Coupled with the Fed's interest rate hike expectations, the banking sector earnings report or continue to shine bright performance.
U.S. bank stocks rose collectively, with JPMorgan Chase up 0.1 percent, Goldman Sachs up 0.97 percent, Citi up 1.65 percent, Morgan Stanley up 1.72 percent and Bank of America up 0.57 percent.