U.S. stocks ended miserably in April, with the Dow falling nearly 2,000 points

U.S. stocks ended miserably in April.

On Tuesday, April 30, local time, the three major U.S. stock indexes closed down across the board. At the close, the Dow fell 1.49%, the NASDAQ fell 2.04%, and the S&P 500 fell 1.57%.

U.S. stocks officially ended in April, with the Dow down 1,991.45 points, or 5.00%, the Nasdaq down 4.41%, and the S&P 500 down 4.16%. This comes after all three major stock indexes recorded five consecutive months of gains.

In addition, the two-year Treasury yield topped 5%, the highest level since November last year. The US dollar rose for the fourth consecutive month, the longest upward trend since September 2022.

On the economic data front, the U.S. labor cost index rose 1.2% q/q in the first quarter, exceeding market expectations and the previous value, the largest increase in a year. Investors are concerned that persistent inflation will force the Federal Reserve to keep interest rates higher for longer.

Economic data exacerbated market panic

On April 30, local time, the three major U.S. stock indexes closed down across the board. At the close, the Dow fell 570.17 points, or 1.49%, to 37,815.92, the Nasdaq fell 325.26 points, or 2.04%, to 15,657.82, and the S&P 500 lost 80.48 points, or 1.57%, to 5,035.69.

According to data released by the U.S. Bureau of Labor Statistics on Tuesday, the U.S. labor cost index rose 1.2% q/q in the first quarter, exceeding market expectations of 1% and the previous value of 0.9%, the largest increase in a year. At the same time, the Conference Board's consumer confidence index has fallen for three consecutive months. U.S. stocks fell sharply on the last day of April and bond yields climbed as investors feared that persistent inflation would force the Federal Reserve to keep interest rates higher for longer.

Fed Chair Jerome Powell, in his last speech, noted the lack of further progress in reducing inflation and the continued strength of the labor market. Analysts believe that a series of data released on Tuesday, coupled with strong expectations for the jobs report, is unlikely to change Jerome Powell's attitude.

Andrew Brenner of NatAlliance Securities said: "The market is in a state of complete fear due to the upcoming Fed interest rate decision. Interest rates are also not going to fall in the near future, and it is difficult for the stock market to justify their prices. ”

The S&P 500 fell 1.57% on Tuesday, its biggest drop since Jan. 31, the data showed.

The two-year Treasury yield topped 5%, the highest level since November last year. The US dollar rose for the fourth consecutive month, the longest upward trend since September 2022.

Jose Torres of Interactive Brokers said: "Stocks, bonds and the U.S. dollar have all been affected by Powell's interest rate decision, and a slew of data this morning justifies the Fed's increasingly hawkish position. ”

Joe Davis of Vanguard Navigator said: "The inflation data for the past quarter has been unexpectedly hot, and these surprises can no longer be explained by a single cause. Time will tell, but the data suggests that what we call a 'delayed landing' is more likely to happen than the long-awaited 'soft landing'. ”

HSBC strategists said high inflation in the U.S. this year is not necessarily bad news for stock market gains, as rising yields reflect strong economic growth. "If the Fed's rate cuts were more like a rebalancing in the mid-90s and 2019, it wouldn't necessarily be bad news for risk assets," they wrote. ”

Eli Lilly and Amazon's revenues exceeded expectations, and Musk expressed his attitude towards layoffs

In terms of sectors, all 11 sectors of the S&P 500 closed lower, led by energy, consumer discretionary, materials, industrials and technology.

Popular tech stocks were broadly down. Tesla fell more than 5%, ASML fell more than 4%, Supermicro Computer, Amazon, Microsoft fell more than 3%, Broadcom, Intel, Google A fell more than 2%, Qualcomm, Apple, Cisco, Texas Instruments, Netflix, Nvidia, Micron Technology fell more than 1%, TSMC, Meta fell slightly, and Eli Lilly rose more than 5%.

Tesla fell 5.55%. Tesla CEO Elon Musk recently fired two executives and plans to lay off hundreds of employees due to dissatisfaction with declining sales and the progress of layoffs so far, The Information reported on Tuesday. Among the executives who were fired were Rebecca Tinucci, a senior executive in charge of the Supercharger business, and Daniel Ho, head of the new model project. In addition, Musk also plans to disband the public policy team, led by former executive Rohan Patel.

In an email to executives, Musk said: "Hopefully these actions will make it clear that we need to show absolute toughness on people and cost cuts." The email noted that while some executives have taken the issue seriously, most have not.

Microsoft fell 3.21%. Microsoft plans to invest $1.7 billion in Indonesia over the next four years to expand cloud services and artificial intelligence technologies, including the construction of data centers, Microsoft CEO Satya Nadella said on Tuesday. Jakarta is the first stop on Satya Nadella's trip to Southeast Asian countries, and he will visit Malaysia and Thailand later this week to promote the company's generative AI technology. In addition, Microsoft has pledged to train 2.5 million people in Southeast Asia to use AI by 2025, including 840,000 Indonesians. Satya Nadla's trip to Jakarta also included talks with outgoing Indonesian President Joko Widodo and his cabinet ministers to discuss joint AI research and talent development. Joko Widodo suggested that Microsoft could consider setting up a data center in Bali or Nusantara, a new capital city under construction. In addition, Microsoft is also expanding its support for AI development globally, including a $2.9 billion investment in Japan and a $1.5 billion investment in G42, an AI company in the United Arab Emirates.

Meta fell 0.57%. A Meta spokesperson said on Tuesday local time: "We have a well-established process for identifying and mitigating risks on our platform. We look forward to continuing to work with the European Commission and providing them with more details on this work. This follows an investigation by the European Commission into the failure of Facebook and Instagram to address deceptive advertising and disinformation ahead of the European Parliament elections.

Google A fell 2.03%. Alphabet's Google has agreed to pay News Corp, the owner of The Wall Street Journal, $5 million to $6 million a year to develop new AI-related content and products, The Information reported on Tuesday. The report quoted a News Corp. employee and another person familiar with the matter as saying the new arrangement is part of a long-standing partnership between Google and News Corp.

A News Corp spokesperson said: "We have absolutely no AI content licensing agreement with Google, although we do have a number of partnerships with Google in various areas of our business." According to earlier news, OpenAI has had similar deals with news publishers such as the Financial Times and Axel Springer. Currently, many AI companies in the market are looking to partner with news organizations to license their archived content to train their chatbots.

Amazon fell 3.29%. Amazon announced its first-quarter earnings report on Tuesday, which showed that Amazon's net sales in the first quarter were $143.31 billion, higher than analysts' forecasts of $142.59 billion, and Amazon's stock price rose more than 5% after hours before retreating. At the same time, Amazon said that capital expenditures will be higher in the second to fourth quarters compared to the first quarter, and the increase in headcount will be mainly concentrated in the logistics and distribution areas.

Amazon is under increasing pressure to become one of the few big U.S. tech companies that don't pay regular dividends to shareholders as tech giants declare dividends. Recently, Google's parent company Alphabet announced the start of a dividend, after Meta announced a dividend in February, and companies such as Microsoft, Apple and Nvidia have been paying dividends for more than a decade. This makes Amazon and Tesla the only two of the Big Seven in tech that don't pay dividends. Analysts believe that the dividend payment decisions of other tech giants may have some impact on Amazon, and Amazon may consider following up. In addition, Amazon's peers' decision to pay dividends also shows their profitability and ability to grow earnings, which makes Amazon relatively isolated among big tech companies.

Eli Lilly rose 5.95%. Eli Lilly on Tuesday reported strong first-quarter financial results, raising its full-year revenue and profit forecasts. The company's first-quarter revenue reached $8.77 billion, up 26% year-over-year, and while it was $160 million below the consensus estimate, non-GAAP earnings per share were $2.58, above the consensus of $0.09. This growth was mainly driven by strong demand for several of its main drugs – Mounjaro, Zepbound, Verzenio and Jardiance. In the U.S. market in particular, final revenue increased 28% to $5.69 billion, driven by a 16% increase in sales prices and a 12% increase in volumes.

In addition, Eli Lilly raised its full-year revenue guidance for 2024 by $2 billion to $42.4 billion to $43.6 billion, while also raising its full-year earnings per share guidance. The company's new drug, Zepbound, achieved significant sales results in the U.S. market, with revenue of $517 million in the first full sales quarter, far exceeding Wall Street expectations.

Large bank stocks closed lower across the board

Large bank stocks closed lower across the board. UBS, Citigroup, Bank of America, and Morgan Stanley fell more than 1%, while Goldman Sachs, BlackRock, JPMorgan Chase, and Wells Fargo fell slightly.

Goldman Sachs fell 0.95%. Goldman Sachs Group Inc. is in discussions with Barclays to transfer its co-branded credit card program with General Motors to the latter, according to the Wall Street Journal, citing people familiar with the matter. The outstanding balances of these credit cards are about $2 billion. According to the report, Barclays was a prime candidate to take over the credit card offering, while Bank of America and Bread Financial were among the bidders who were also considered but ultimately failed to close. The deal is expected to be made this summer. At the moment, neither Goldman Sachs nor Barclays have commented on the report, and General Motors has not responded immediately. Originally issued by Goldman Sachs in 2022 through Mastercard, the credit card program allows users to earn more points that can be used to buy or lease vehicles from GM brands such as Buick and Cadillac.

Citigroup fell 1.49%. Citigroup CEO Jane Fraser noted at the company's annual meeting on Tuesday that U.S. consumers have become more cautious in spending, and lower-income earners are struggling to maintain loan payments, which has forced banks to become more cautious in issuing credit cards and car loans. While consumers remain healthy and resilient overall, they have become more selective about their spending patterns, she said. She also mentioned that delinquency rates have risen to pre-pandemic levels in all loan classes except mortgages. Jane Fraser also spoke at the conference about the major reforms Citigroup is underway, including the sale of its overseas retail business and the reduction of its headcount, moves that have seen its share price rise more than 20% this year, outpacing rivals JPMorgan Chase and Bank of America.

Energy stocks were broadly lower. Murphy Oil fell more than 4%, ConocoPhillips, Occidental Petroleum, Chevron fell more than 3%, Petrobras fell more than 2%, Shell fell 2%, BP and ExxonMobil fell more than 1%, and U.S. Energy rose more than 1%.

Popular Chinese concept stocks generally fell. The Nasdaq China Golden Dragon Index fell 3.23%. Bilibili fell more than 5%, iQiyi fell more than 4%, JD.com, NetEase fell more than 3%, Weibo, Tencent Music, Baidu, Li Auto, Full Bang, Alibaba fell more than 2%, Futu Holdings, Pinduoduo fell more than 1%, Weilai rose more than 2%, and Xiaopeng Motors rose slightly.

Editor-in-charge: Li Dan

Proofreader: Li Lingfeng

The 2024 Securities Times "Looking for the 'Golden Eagle' of Venture Capital and Discovering the 'New Seedlings' of Enterprises" plan was grandly reopened, lighting up the dream of the times and blooming the light of the times.

Click on the poster to register, and quickly poke ↓↓↓

Copyright Notice

All original content on the platforms of the Securities Times shall not be reproduced by any unit or individual without written authorization. Our company reserves the right to pursue the legal responsibility of relevant actors. For reprinting and cooperation, please contact the Securities Times assistant, WeChat ID: SecuritiesTimes

END

Click on a keyword to view it

Periscope Series In-depth Report丨Stock Council Column丨Investment in Xiaohongshu丨E Company Investigation丨Times Meeting Room丨Top Ten Celebrity Private Equity Interview丨Suddenly!Less than 1 month after his resignation, the chairman and general manager of the well-known A-share were both investigated!丨The latest announcement of the "Evergrande Department"!China Evergrande delayed the release of results, and Hengchi 5 delivered a total of 1,389 vehicles丨Implement "1+N", and 9 supporting rules are newly released!丨Just now!The China Securities Regulatory Commission revised the evaluation criteria for scientific and technological innovation attributes!丨Earn more than 200 million yuan in one day! Huawei's net profit in the first quarter rose 5.6 times丨Mysterious private placement "cleared" Kweichow Moutai?!丨Heavy!ICBC and CCB officially announced on the same day!丨Suddenly!The Japanese government made an emergency move: 24-hour intervention丨Late night official announcement丨Moutai will change its commander, 51-year-old Zhang Deqin plans to be the chairman (with resume)