News from the financial world on October 29, the core PCE price index of the United States in September showed that the potential inflationary pressure in the United States is still high, which strengthened the market expectation that the Fed will continue to raise interest rates sharply next week, thereby pushing the dollar and US Treasury yields to climb, and US stocks soared across the board under the strong rise in the stock prices of Apple and Intel and other companies, the Dow rose more than 800 points, the Nasdaq rose more than 300 points to return to the 11,000 mark, and the S&P stood at the 3900 mark; Communication services, semiconductors and financials led the gains, with Apple up 7.56%, Intel up 10.7%, Gilead Sciences up 12.91% and Amazon down 6.8%.
By the close, the Dow Jones was up 828.52 points, or 2.59%, at 32,861.80, the S&P 500 was up 93.25 points, or 2.45%, at 3,900.55, the Nasdaq Composite was up 309.78 points, or 2.87%, at 11,102.45, the Dow was up 5.72% for the week, four consecutive weeks of gains, the Nasdaq was up 2.24%, and the S&P 500 was up 3.95% for two consecutive weeks.
December gold futures on the New York Mercantile Exchange fell $20.80, or nearly 1.3 percent, to settle at $1,644.60 an ounce. Prices based on the most active contracts closed down 0.7% for the week. December silver futures fell 35 cents, or 1.8 percent, to $19.147 an ounce and rose 0.4 percent for the week. Palladium fell $41, or 2.1%, or 5.4%, to $1,897.20 an ounce in December, while platinum fell $18.30, or 1.9%, to $949.10 an ounce in January, up 1.6% from last week. Copper futures for December fell 9 cents, or 2.6 percent, to $3.429 a pound, a weekly drop of 1.3 percent.
December futures for West Texas Intermediate crude on the New York Mercantile Exchange fell $1.15, or 1.3 percent, to $87.93 a barrel, posting a weekly gain of 3.4 percent for the week, the first rise in three weeks for the front-month contract. ICE Futures Europe's global benchmark Brent crude for December fell $1.11, or 1.1 percent, to $95.85 a barrel, up 3.5 percent for the week, while the most actively traded January Brent crude futures fell $1.07, or 1.1 percent, to $93.97 a barrel. Back on the New York Mercantile Exchange, gasoline prices fell 5.5 percent to $2.8459 a gallon in November and heating oil rose 5.95 percent to $4.4678 a gallon in November. Natural gas prices fell 3.1% to $5.695 per MMBtu in December.
Fangduoduo rose more than 36%, Mushroom Street rose more than 13%, Danai Technology rose more than 11%, Uxin rose more than 8%, Tuya Intelligent rose more than 7%, Litchi rose more than 5%, Tiger Securities and Waterdrop Company rose more than 4%, 360 Digital rose more than 3%, Happy Auto rose more than 1%, and Leju rose nearly 1%. Xunlei fell by more than 15%, BOSS Zhipin fell by more than 11%, Dingdong Shopping and Wuxin Technology fell by more than 8%, Kingsoft Cloud and Shell fell by more than 7%, Bilibili, Canaan Technology, Monster Charging, Tuniu, Huanju Group fell by more than 5%, and New Oriental and JD.com fell by more than 4%. Suntech, Autohome, 51Talk, Phoenix New Media, Yixian E-commerce, Qinhuai Data, Onion Group, Alibaba fell more than 3%, Baidu, Zhiwen Group, Zhihu, Basket Technology, Tencent Music, Netease, Manbang fell more than 2%, Sohu, Ctrip, Vipshop, Cheetah Mobile fell more than 1%, and iQiyi fell nearly 1%. The new energy sector fell: Xpeng Motors fell 6.39%, Li Auto fell 4.84%, and NIO fell 2.91%.
Yellen: There are no signs of a recession at the moment
While Americans are battling high inflation and the market is still in a bear market, U.S. Treasury Secretary Janet Yellen said she doesn't think we're heading for a recession, noting low unemployment as a key factor.
Yellen said in an interview Thursday: "We are in a full-employment economy and it is natural for growth to slow. The same was true for the first three quarters of the year, but it was still good. Our labor market is very strong. I don't see any signs of a recession at the moment. Yellen, meanwhile, acknowledged that inflation has caused pain. "It's an unacceptably high level, and Americans feel that way every day," she said in an interview. She added that efforts to ease this pain and reduce inflation are likely to continue "for years to come."
Yellen also said the U.S. economy is still stronger than many other countries, again citing the low unemployment rate in the U.S. "If you look around the world, you see that a lot of economies are not only affected by high inflation, but also have very weak economic performance, especially in the United States," he said. Our unemployment rate is at a 50-year low. ”
The Fed's most important inflation measure remains high and volatile "Slow rate hikes" still needs clear data
The US Department of Commerce's Bureau of Economic Analysis (BEA) released PCE data for September, showing that the current state of inflation in the United States, although roughly in line with expectations, is still at a high level in absolute terms. Looking at the data, PCE inflation, the core of the Fed's policy target, rose 0.5% month-on-month in September, in line with expectations, up 5.1% year-on-year, slightly lower than the expected value of 5.2%. Adding in more volatile food and energy prices, the September PCE data rose 0.3% m/m and 6.2% y/y, respectively, exactly the same as in August. Meanwhile, the US personal income and expenditure data for September were 0.4% and 0.6%, respectively, which were also better than expected.
The main reason why the Fed likes to look at PCE data is that the Commerce Department's index adjusts for consumer behavior, replacing some less expensive goods than the CPI, so as to more accurately reflect the cost of living rather than just price fluctuations.
The Fed's interest rate decision is coming! Whether the global economy will recession depends on this move
Fed officials will maintain a firm hawkish stance next week, setting the stage for a 5 percent rate by March 2023, but the move seems likely to lead to a U.S. and global recession, economists said. According to the survey, the market expects the Fed to raise interest rates by 75 basis points for the fourth time in a row at next week's interest rate decision. In addition, the survey also expects the Fed to raise another 50 basis points in December, followed by 25 basis points at each of its subsequent meetings.
While economists' median expectation is a 50 basis point rate hike in December, almost a third of them expect a 75 basis point hike. It is worth mentioning that economists expect interest rates on a similar path to market expectations, which expect the Fed to raise interest rates by 75 basis points next week and favor a 50 basis point rate hike in December, with interest rates expected to peak at around 4.8%.
US Treasury Secretary Yellen: GDP data proves that the US economy is resilient
U.S. Treasury Secretary Janet Yellen said that while slowing economic growth will help curb inflation, data released Thursday shows that the U.S. economy is resilient in the face of global challenges. Data released on Thursday showed that U.S. GDP was annualized at 2.6 percent in the third quarter, beating economists' forecasts of 2.3 percent. Yellen noted that the data "clearly indicates that U.S. economic growth is solid." "We've seen the U.S. economy move from very rapid growth to sustainable growth now, and the economy has lived up to its potential," she said. ”
Yellen also said she believes the Biden administration is capable of responding if the U.S. economy falls into a deep recession. "We need to be careful not to use fiscal policy to exacerbate inflation," she said. "If there's a serious recession that requires us to respond, I think we still have plenty of fiscal room to do so."
Pelosi's husband was attacked at home Pelosi was not present
U.S. House Speaker Nancy Pelosi's office said in a statement that outsiders broke into the Pelosi's home in California early Friday, and Pelosi's husband, Paul Pelosi, was "violently attacked."
"The attacker has been detained and the motive for the attack is under investigation," the statement said. "Mr. Pelosi was taken to the hospital, where he was treated very well and is expected to make a full recovery."
Bank of America team: U.S. Treasuries rebound sharply next year The stock market may fall
Bank of America strategists say benchmark U.S. Treasuries are facing their worst annual returns since 1788, but the new year could see a sharp rally while stocks could tumble. The team reviewed the past 250 years of history and concluded that bonds will deliver positive returns in 2023 as markets shift from extreme pessimism caused by inflation and interest rate shocks to expectations of a recession. The data shows that the 10-year U.S. Treasury note has fallen 23% annualized so far this year, which is set to fall for the second consecutive year, and this class of assets has never recorded a decline for three consecutive years.
The team said that global markets have experienced 243 rate hikes this year, equivalent to one rate hike every trading day, but given the "blink" of policy by the Bank of England, the Reserve Bank of Australia and the Bank of Canada, the bond market is now starting to adjust. In addition, they expect a "recessionary shock" in the future, which will cause credit spreads to rise to new highs, and the stock market may hit new lows in the first quarter of next year.
GDP growth returns to Q3 The US economy escaped a recession?
Is the U.S. economy currently heading for a recession, or has it just avoided it? This is a question everyone is asking. According to preliminary estimates from the Commerce Department on Thursday, gross domestic product (GDP) grew at an annualized rate of 2.6 percent in the third quarter. Previously, the US economy contracted for two consecutive quarters, which led many to believe that the United States fell into recession.
Consumers and businesses that remain resilient largely drove third-quarter GDP growth. Personal consumption — the biggest contributor to the economy — grew at 1.4 percent, better than expected, but also slower than in the previous quarter. While economic growth is generally a good sign, some market watchers worry that continued strength means the Fed will have to keep raising interest rates longer to keep inflation under control, which could eventually lead to a slowdown.
The Bank of Japan maintains ultra-low interest rates and raises its inflation forecast for FY2022
The Bank of Japan announced its interest rate decision, keeping its benchmark interest rate at a record low of -0.1% and keeping the 10-year JGB yield target around 0%, in line with market expectations. In addition, the Bank of Japan raised its forecast for Japan's core CPI growth in FY2022 to 2.9% from 2.3% previously. Amid the wave of tightening monetary policy by major central banks around the world, the Bank of Japan remains a "dovish outlier".
It is reported that the Bank of Japan stressed that it will not hesitate to increase easing if necessary, and reiterated that there are no restrictions on the purchase of Japanese government bonds. According to the statement, the Bank of Japan unanimously passed the yield curve control (YCC) decision, expecting short- and long-term interest rates to remain at current or lower levels, still believing that inflation will fall below 2% in the next fiscal year, and core consumer inflation may slow the pace of growth in the middle of the next fiscal year.
Bank for International Settlements: Global foreign exchange market trading volume climbed to an all-time high this year
The Bank for International Settlements said in its triennial survey released on Thursday that trading volumes in the global foreign exchange market climbed to record highs amid heightened volatility. The data shows that the average daily transaction volume increased to $7.5 trillion in April this year, an increase of 14% from the same period in 2019. This compares with a growth rate of 30% in 2019 and a contraction of 5% in 2016. After years of downturn, currency volatility has risen sharply as inflationary shocks prompted central banks to raise interest rates and the Russia-Ukraine war has disrupted financial markets.
The BIS noted that large currency swings create inventory imbalances among traders, forcing them to sell positions in the inter-dealer market more frequently. On the other hand, pandemic restrictions in some regions may have dampened trading. The bank also said that the increase in trading volume between 2019 and 2022 reflected more inter-dealer transactions, while increased volatility in the foreign exchange market in April 2022 pushed up the increase in trading volume.
JPMorgan analyst: The Fed is expected to pivot in the fourth quarter of next year
Julia Wang, executive director of JPMorgan Private Bank, said that judging by the direction of inflation and the labor market in the United States, the Fed is expected to turn as early as the fourth quarter of next year.
Wang said that while some inflation leading indicators have moved lower, the overall momentum is still quite strong, and it will take at least a few months for the core PCE index to reflect. It will take until the end of next year that inflation is likely to be truly sustainable. As for the U.S. labor market, Wang believes signs of weakness are expected around the middle of next year, but it will take about 12 months for a material slowdown to occur. Therefore, it is likely that the situation in the labor market will not be in line with the scenario for the Fed's inflation target until the end of next year. As a result, Wang said that the inflation trading mechanism will continue in the coming months.
As soon as Musk took over Twitter, EU officials warned: We must abide by our rules
Thierry Breton, the EU's internal market commissioner, issued a warning to Elon Musk, the richest man in the world. Breton hinted that after completing the acquisition of social media platform Twitter, Musk must play by the rules.
After six months of entanglement, Musk finally completed his $44 billion acquisition of Twitter on Friday and will serve as CEO himself. To that end, he tweeted: "This bird is finally free. Note: The Twitter logo is a small blue bird. Breton later responded to the tweet by saying: "In Europe, birds will fly by our rules. ”
Elon Musk will pay more than $200 million to three fired Twitter executives
Twitter CEO Parag Agrawal, CFO Ned Segal and head of legal policy Vijaya Gadde were given the "golden parachute" clause when Twitter merged with Musk's X Holdings. According to Twitter's filing with the U.S. Securities and Exchange Commission (SEC), Musk reportedly fired the three after officially taking over the social network on Thursday night with a $44 billion acquisition and will be obligated to pay them more than $204 million.
Agrawal, Siegel and Gade own about 1.2 million shares of Twitter, of which Gade holds more than half of the $34.8 million. The roughly $65 million stake in the trio will be bought by Musk like he would buy shares in other shareholders.
The "only seedling" in FAANG Apple has been greatly praised by Wall Street
Apple announced its fiscal fourth quarter results. While the company was cautious about holiday season sales, the better-than-expected results still made analysts praise the company.
Evercore analyst Amit Daryani maintained Apple's "overweight" rating, saying Apple was "the last company in the FAANG" to stand tall amid the fall of other large-cap stocks this week. Daryani wrote in a note: "We believe Apple remains uniquely positioned to sustain mid-to-high-single-digit sales growth and low-mid-double-digit EPS growth on a multi-year basis." ”
Wang Li, CEO of Zhiwen Group, resigned due to physical problems and Tang Yan took over
Mobile social and entertainment platform Zhiwen Group announced today that Mr. Wang Li resigned as CEO with immediate effect due to health reasons, and the role will be replaced by Chairman Mr. Tang Yan. Mr. Wang Li remains the Executive Director and President of the Group, assisting Tang Yan in advancing the company's core strategy. According to public information, Mr. Wang Li, as the founding partner of Zhiwen Group, has been the company's COO since 2014, the company's president since 2018, and the company's CEO in 2020.
Regarding this change, Mr. Tang Yan said: "Wang Li, as a business partner I have worked with for many years, has done his duty and achieved excellent results during his tenure as CEO, but due to long-term high-pressure work, he has a series of problems in his health, and he feels unable to engage in comprehensive management work, and decided to step down as CEO after communication. But he will continue to serve as Group President, assisting me in my work, taking charge of important matters and facing the challenges of the future together. ”
Ernst & Young is an independent certified public accounting firm
On October 28, Nenglian Zhidian announced that the company's audit committee and its board of directors have approved the appointment of Ernst & Young Hua Ming CPA (EY) as the company's independent certified public accounting firm, effective October 28, 2022.
Good Future's net loss in Q2 of FY2023 narrowed significantly year-on-year
Good Future announced its unaudited financial report for the second quarter of fiscal 2023, showing that Good Future's Q2 net income in fiscal 2023 fell from $1.444 billion in the same period last year to $294 million in the current quarter, a year-on-year decrease of 79.6%. Operating income was $14.89 million, compared to an operating loss of $379.87 million in the year-ago quarter. Non-GAAP operating income (excluding stock-based compensation expense) was $42.32 million, compared to a non-GAAP operating loss of $313.44 million for the year-ago quarter. Net loss attributable to Good Future was $0.79 million, compared to a net loss attributable to Good Future of $826.55 million in the same period last year.
This article originated from the financial community