In the early morning of the 17th, Beijing time, U.S. stocks closed mixed on Tuesday, and the Dow ended its six-day losing streak. Treasury yields continued to climb, with the 10-year yield approaching 4.7%. Fed Chair Jerome Powell has hinted that stubborn inflation may cause the central bank to maintain a high interest rate policy for longer. Fed Vice Chair Jefferson said that keeping interest rates unchanged would help bring inflation down.
The Dow rose 63.66 points, or 0.17%, to 37,798.77, the Nasdaq fell 19.77 points, or 0.12%, to 15,865.25 and the S&P 500 lost 10.44 points, or 0.21%, to 5,051.38.
The U.S. 10-year Treasury yield rose for the second day in a row on Tuesday, rising 3.7 basis points to 4.665% in late trading and rising as high as 4.696% during the session, the highest since November.
Shares of UnitedHealth, a component of the Dow, rose more than 5%, pushing the Dow higher. The company's revenue for the fiscal first quarter was better than expected.
Johnson & Johnson, another Dow Jones & Johnson company, reported mixed quarterly results.
Morgan Stanley and Bank of America both reported earnings and revenues that beat consensus expectations on Wall Street.
In his speech on Tuesday, Fed Chair Jerome Powell hinted that stubborn inflation could cause the central bank to delay interest rate cuts.
Powell said recent inflation data suggests that it may take longer for central banks to be confident enough to cut interest rates. Powell noted that the Fed has not made much progress in fighting inflation since the rapid decline in inflation at the end of last year, and that the Fed could keep interest rates unchanged "for as long as necessary" if price pressures persist.
In a panel discussion with Bank of Canada Governor Tiff Macklem, Powell noted that "the recent data clearly does not give us greater confidence, on the contrary, it suggests that it may take longer than expected to achieve that confidence".
Federal Reserve Governor Philip Jefferson said Tuesday that he expects inflation to continue to decline as the Fed continues to implement restrictive policies.
Discussing how policymaking has changed over the years, Jefferson said: "My base case remains that inflation will fall further, policy rates will stabilize at current levels, the labor market will remain strong, and labor demand and supply will continue to rebalance." ”
"Of course, the outlook remains quite uncertain, and if the upcoming data suggests that inflation is more persistent than I currently expect, it would be appropriate to maintain the current restrictive policy stance for longer," he added.
Nick Timiraos, known as the "new Fed news agency", said that after Powell's speech, "the possibility of the FOMC cutting interest rates first, or cutting rates due to a soft landing, has been temporarily wiped out." U.S. inflation became stronger in the first quarter, giving the Fed a timetable to reset its confidence in a sustainable 2% pullback in inflation. ”
On Tuesday's economic data front, the U.S. Department of Commerce reported that new home starts and construction permits fell short of expectations in March.
On a seasonally adjusted basis, private housing starts totalled 1.32 million units this month, below Dow Jones' forecast of 1.48 million units. Housing starts fell 14.7% month-on-month and 4.3% month-on-year in February.
Construction permits fell 4.3% month-on-month to 1.46 million units in March, below an estimate of 1.51 million units. The total number of housing units completed was 1.47 million, down 13.5% from February.
The Federal Reserve reported on Tuesday that U.S. industrial production grew 0.4% month-on-month in March, in line with market expectations, but fell 1.8% in the first quarter of 2024.
The Fed also said capacity utilization, a measure of total output potential, was 78.4%, up 0.2 percentage points from February but slightly below the Dow Jones estimate of 78.5%. This indicator is below the long-term average of 79.6%.
Stocks in focus
UnitedHealth's first-quarter revenue and adjusted earnings per share both beat consensus estimates. The company's adjusted earnings per share for the fiscal first quarter were $6.91, beating analysts' average estimate of $6.59 per share. Revenue for the fiscal first quarter was $99.8 billion, up 8.6% year-over-year and beating analysts' expectations of $99.3 billion.
UnitedHealth expects earnings per share to be in the range of $17.60 to $18.20, mainly due to cyberattacks and the sale of its Brazilian operations, but maintains its guidance for 2024 adjusted earnings per share of $27.50 to $28.00.
Morgan Stanley's first-quarter revenue was $15.14 billion, up 4% year-on-year, better than market expectations, and net profit was $3.41 billion, up 14% year-over-year. Earnings per share were $2.02, better than the consensus estimate.
Morgan Stanley's trading revenue of $5.33 billion beat market expectations. The company's wealth division generated $6.88 billion in revenue, beating market expectations. The division's net new assets of $95 billion were higher than in the previous two quarters combined and above the level needed to meet the bank's business growth targets.
Bank of America beat analysts' expectations in both fiscal first quarter profit and revenue, with interest income and investment banking both better than expected. Revenue was $25.98 billion, down 1.8% year-over-year, compared to analysts' expectations of $25.46 billion. Net income was $6.7 billion, or 76 cents per share, down 18% year-over-year. Adjusted earnings per share, which excludes $700 million in FDIC special assessment charges, were 83 cents versus analysts' expectations of 76 cents.
Johnson & Johnson's first-quarter sales increased 2.3% year-over-year to $21.38 billion, and net income increased to $5.35 billion.
Two of Tesla's top executives have left. On April 15, two Tesla executives, Drew Baglino and Rohan Patel, also announced their departures after announcing in an internal email that they would lay off 10% of their global workforce. Baglino was one of Tesla's early employees, having been in the company for 18 years, as senior vice president of powertrain and energy engineering at Tesla, reporting directly to Elon Musk. Patel joined Tesla in 2016 and served as vice president of public policy and business development.
According to TrendForce, the previous generation of the Nvidia GB200 was the GH200, and shipments are estimated to account for only about 5% of the overall Nvidia high-end GPUs. At present, the industry has high hopes for Nvidia GB200, and it is estimated that shipments will exceed one million units in 2025, accounting for nearly four to fifty percent of Nvidia's high-end GPUs. It is expected that products such as GB200 and B100 will have the opportunity to be officially increased from the fourth quarter of this year to the first quarter of 2025. As NVIDIA's B series including GB200, B100, B200, etc. will consume more CoWoS production capacity, TSMC has also increased its CoWoS production capacity demand for the whole year of 2024, and it is estimated that the monthly production capacity will be close to 40,000 by the end of the year, an increase of more than 150% compared with the total production capacity in 2023.
AMD on Tuesday officially unveiled a new generation of AI PC innovations for the commercial computing space, namely new processors for the commercial market. Commenting on the new products, Ronak Shah, AMD's Worldwide Marketing Manager for Commercial Products, said, "They are arguably the industry's best products for desktops, workstations and laptops in the commercial sector. These products, which are about to be officially released, can be said to surpass the achievements that have been made in the past, and will take another big step forward in the two areas of product performance and energy efficiency. ”
Apple CEO Tim Cook said on Tuesday that he wants to improve the quality of his investment in Vietnam. In addition, according to media reports, Apple is in advanced negotiations with the Tata Group's Titan and Murugappa Group to assemble and even manufacture sub-assemblies of the iPhone camera module.
According to data released by Canalys, global smartphone shipments in the first quarter of 2024 increased by 11% year-on-year as the global macro economy recovers and consumer demand picks up. Samsung returned to the top with a 20% market share. Apple is in second place with a market share of 16% and faces challenges in its strategic focus markets.
Microsoft has invested $1.5 billion in G42, a UAE-based AI company, and has been given a seat on the board. On the evening of April 15, local time, Microsoft released an official blog post announcing that Microsoft would invest $1.5 billion in G42, an AI company headquartered in the United Arab Emirates, to obtain a minority stake and board seats in G42. The two companies will work together to develop AI products and support the establishment of a $1 billion fund for developers to improve AI skills in the UAE and the wider region.
Google Cloud recently detailed an in-house developed CPU designed based on Arm cores - Axion.
Google Cloud CEO Thomas Kurian unveiled the CPU during a keynote speech at the Cloud Next conference in Las Vegas, USA. At the event, Google Cloud also announced the general availability of its latest AI accelerator, TPU v5p, which is twice as powerful as its predecessor when processing floating-point numbers, the unit of data commonly used by AI models.
Amazon Music launches a new AI playlist generator, Maestro.
Meta Platforms said on Tuesday that it would suspend access to Threads in Turkey to comply with a temporary order from the country's competition watchdog prohibiting the app from sharing data with Instagram. Meta said the suspension would be temporary as it plans to appeal the Turkish Competition Authority's order.
Boeing engineer Sam Salehpour said the Boeing 787 should be grounded and that he will appear before Congress on Wednesday. Mr. Salehpour said he had become alert during the production of the Boeing 787 Dreamliner and had raised concerns with his superiors about a number of issues. Boeing, on the other hand, insists that the aircraft is safe.
UBS Capital Requirement could increase by $15 billion to $25 billion.
Trump Media Technology Group has announced a phased rollout of the streaming platform.
Elsewhere, crude oil futures for May delivery on the New York Mercantile Exchange closed down $0.05, or about 0.05%, at $85.36 a barrel.