U.S. stocks fell, and the three major indexes all fell by more than 1%! Popular Chinese concept stocks lower, JD.com fell more than 10%

U.S. stocks fell, with all three major indexes down more than 1%. Popular Chinese concept stocks were lower, with JD.com down more than 10%, Pinduoduo down more than 8%, and Alibaba down more than 3%.

Arbe Robotics, a provider of 4D imaging radar solutions, rose more than 50 percent after reports that Tesla's new Model 3 may come standard with 4D millimeter-wave radar.

Faraday Future rose more than 5 percent as its flagship electric car, the FF91 Futurist, is expected to begin production on March 30.

Market news

The risk of a U.S. default looms, forcing investors to reduce some of their U.S. Treasury exposure. Bond investors began reducing their holdings of U.S. Treasuries in response to a possible government default. In their view, the likelihood of a default by the U.S. government is slim, but it could have a huge impact on global financial markets. The U.S. Treasury last month hit a borrowing cap of $31.4 trillion. Unless Congress raises or suspends that cap, the U.S. government could start defaulting on bonds that underpin the global financial system, which are considered one of the safest investments. Some bond managers have begun to adjust their short-term exposure to U.S. Treasuries to avoid losses during periods when the government may be depleted. Preparing for a potential default is tricky, in part because the Treasury Department is uncertain about how much it will receive from Americans who file income taxes in April.

The minutes hit Thursday! The Fed may be more hawkish than expected, dousing hopes of pausing interest rate hikes. The Federal Reserve will release the minutes of its February monetary policy meeting in the early morning of Thursday, February 23, Beijing time. Michael Kramer, founder of Mott Capital Management, believes the minutes may show a sharp rise in interest rates. Kramer said this week's Fed minutes may bring some surprises to investors, but more importantly, it may shed light on the Fed's plan to raise rates. Fed Chairman Jerome Powell said at the FOMC meeting that the minutes will reveal the Fed's discussions on deciding when to stop the rate hike cycle. A big surprise may be that not all Fed members agree to slow the pace of rate hikes. Last week, Cleveland Fed President Mester and St. Louis Fed President Bullard noted that they favor a 50 basis point rate hike.

Bearish sentiment hangs over Wall Street, wary of a new round of "sell-off" in U.S. stocks. The team led by Michael Wilson, chief equity strategist at Morgan Stanley, said expensive U.S. stocks are sending a crucial warning signal that the S&P 500, the benchmark U.S. stock index, could fall about 26 percent to about 3,000 points in the first half of the year. A series of recent hot economic data suggests that the U.S. economy may be able to avoid a recession, but according to Wilson's team of strategists, this largely rules out the possibility of the Fed turning to the easing monetary policy that the market expects. Wilson's team of strategists believes the S&P 500 could fall to 3,000 at some point in the first half of 2023, down about 26% from its recent close and well below the 3,491 percent hit by the sell-off in U.S. stocks in the second half of last year, the lowest since November 2020.

Goldman Sachs: The Fed will raise interest rates by 25 basis points three more times before cutting rates next year. Goldman Sachs Chief Economist Jan Hatzius predicted in an interview with the media today that the Fed will raise interest rates by 25 basis points at its March, May and June meetings to deal with hotter than expected inflation. Jan Hatzius said: "Recent economic data have been stronger than market expectations in terms of growth, and we have seen a sharp rise in inflation data in January." "I don't think it's necessarily going to break the trend to fight inflation, but I think it reinforces the view that the Fed still has a lot of work to do," he said. "So we think the more likely outcome is another 75 basis point rate hike from now on, with no possibility of a rate cut until 2024."

Bank of America and Mozzi Jr. sing: The European stock rally is coming to an end. Wall Street strategists are increasingly convinced that the strong rally in European stocks this year won't last long. According to a media survey of 16 market forecasters, the Euro Stoxx 600 index is expected to close at 455 points in 2023 after rising more than 9%, which means that the index will be down 2% from Friday's close. Bank of America strategist Milla Savova expects the Stoxx 600 to fall about 20 percent to 365 by the third quarter, followed by a bottom in the macroeconomic cycle, and by the end of the year, the index will rebound again to 430. JPMorgan strategist Mislav Matejka echoed the cautious view, saying key currency indicators were "sending warning signals." Despite the strong recovery and resilience of stocks, this has not persuaded strategists to adjust their targets for the year's closing of the Stoxx 600.

Individual stock news

Sohu (SOHU. US) achieved full-year profitability with 2022 revenue of $734 million. In the fourth quarter of 2022, Sohu's total revenue was $160 million. Among them, brand advertising revenue was $29 million and online gaming revenue was $121 million. For the full year of 2022, Sohu's total revenue was $734 million. Among them, brand advertising revenue was $103 million and online gaming revenue was $585 million. Non-GAAP net income attributable to Sohu was $2 million.

Home Depot (HD. US) Q4 net sales missed expectations and expect a mid-single-digit decline in EPS in 2023. Home Depot Q4 net sales of $35.831 billion, compared to $35.7 billion in the year-ago quarter, compared with market expectations of $35.974 billion; Net profit was US$3.362 billion, down 1.13% year-on-year, and the market expected US$3.336 billion; Earnings per share were $3.3, compared to $3.21 in the year-ago quarter. Fourth-quarter operating profit was $4.825 billion, versus market expectations of $4.908 billion. Looking ahead, Home Depot expects a mid-single-digit decline in full-year 2023 earnings per share and expects an operating margin of approximately 14.5% for fiscal 2023. In addition, starting in the first quarter of fiscal 2023, the company will invest approximately $1 billion in an additional $1 billion to pay annualized compensation for frontline and hourly workers.

HSBC. US) net profit attributable to parents in 2022 was US$14.822 billion, up 17.6% year-on-year. HSBC released its 2022 results, with benchmark revenue of US$51.7 billion, up 4% year-on-year; Profit attributable to common shareholders of the parent company was US$14.822 billion, an increase of 17.6% year-on-year. Basic earnings per common share were $0.75. Net interest yield was 1.48%, up 28 basis points, reflecting higher interest rates. The basis for credit losses and other credit impairment charges is expected to be $3.6 billion. Underlying operating expenses decreased by $1.3 billion, or 4%, to $33.3 billion. The Tier 1 capital ratio of common equity was 14.2%, down 1.6 percentage points.

Credit Suisse (CS. US) chairman investigated by regulators for misleading comments. The Swiss Financial Market Supervisory Authority (FINMA) is reviewing Credit Suisse (CS. US) Chairman Axel Lehmann's comments in December about the stabilization of the company's capital outflows, citing that they could be misleading. FINMA is seeking to determine the extent to which Credit Suisse representatives like Lehmann are aware of the reality of customers still divesting when they comment on stabilizing outflows, people familiar with the matter said. Lehmann said in an interview that the surge in customer divestments in early October had flattened and "largely stopped." The comments came ahead of the end of the key $4 billion fundraising, although data released this month suggested that further outflows worth tens of billions of dollars from the company would continue until the end of the quarter. Credit Suisse fell more than 5% premarket.

Driven by rising costs and weak commodity prices, BHP Billiton (BHP. US) lowered the dividend amount. BHP Billiton, the world's largest miner, cut its dividend after rising costs and weak commodity prices led to a drop in half-year profits. Underlying attributable profit from continuing operations fell 32 percent to $6.6 billion in the six months to December 2022, the company said in a regulatory filing on Tuesday. BHP will pay an interim dividend of 90 cents per share, down from last year's record $1.50 per share, and its payout ratio will fall from 78 percent to 69 percent.

AMAZON (AMAZN. US) stock prices have fallen endlessly, and employee stock compensation has shrunk significantly. As Amazon's stock price has fallen more than 36 percent over the past year, the decline has reportedly affected the retail giant's stock-focused compensation plan. Amazon employees are paid well below their target compensation because a significant portion of their annual salary is restricted stock, the report said. According to some people familiar with the matter, Amazon's salary in 2023 is 15% to 50% lower than its expected target for employees. In 2022 alone, Amazon shares fell by nearly 50% as the market slowed overall and investors shunned growth stocks, including big tech stocks. Amazon's retail growth has also slowed. Some people familiar with the matter said Amazon's current share price is about $97 per share, while some employees' compensation is based on the assumption that the stock price is about $170 per share.

Performance forecast

Wednesday morning: Coinbase (COIN. US), Exact Sciences (EXAS. US)

Wednesday premarket: iQiyi (IQ. US), Baidu (BIDU. US)