Surprisingly strong employment data last week raised the possibility of the Federal Reserve raising interest rates. Investors awaited more earnings reports this week and subsequent speeches from Fed Chairman Jerome Powell. Major U.S. stock indexes on Monday ( 6) fell in early trading, the Dow fell 0.3%, the S&P 500 fell 0.5%, the Nasdaq fell 0.77%, and the Fernando fell 1.29.
Investors are also taking profits after the stock market rallied strongly to start the year. The S&P 500 Index has risen more than 7% this year, and the Nasdaq Composite Index has risen in the past five consecutive weeks.
The dollar continued to gain on Monday after surging more than 1% on Friday. Due to the exceptionally good employment data, the unemployment rate hit a 53-year low, suggesting that inflation may persist, supporting further interest rate hikes in the future. Rand Merchant Bank economists released a report that this number undoubtedly provides investors with another factor to consider when predicting the direction of the Federal Reserve in the coming months.
Chinese stocks were set to fall for a third straight session after Washington shot down a surveillance balloon it said was from China, sparking fresh tensions between the two countries.
Earnings season is halfway through, with S&P 500 companies on track for a 2.7 percent drop in fourth-quarter profits, according to Refinitiv data.
Markets could be on edge ahead of Powell’s speech Tuesday at the Economic Club of Washington. Powell’s comments on deflation caused investors to ignore the possibility of the central bank raising interest rates last week and continued to chase stocks.
As of 22:00 on Monday, Taipei time: The Dow fell 101.48 points, or 0.3%, to 33,824.53; the Nasdaq fell 92.28 points, or 0.77%, to 11,914.68; the S&P 500 fell 20.65 points, or 0.5%, to 33,824.53 4115.83 FSA fell 39.75 points, or 1.29%, to 3042.36 TSMC ADR fell 2.74% to $91.97 per share Ten-year U.S. Treasury yield rose 9 basis points to 3.61% New York light crude oil rose 1.25% to a barrel Brent crude rose 1.49% to $81.13 a barrel at $74.31 Gold rose 0.4% to $1885 an ounce The dollar index rose 0.04% to 103.31 Stocks in focus:
Dell (DELL-US) fell 2.9 percent to $41.01
Dell (DELL) has become the latest technology company to announce thousands of layoffs, announcing it will cut about 6,650 jobs amid slumping global demand for personal computers (PCs).
The layoffs represent about 5% of the global workforce, a Dell spokesman said. After layoffs, the total number of employees will hit a six-year low.
Tyson Foods (TSN-US) fell 5.83% to $60.30
Tyson Foods missed Wall Street’s revenue expectations for the quarter, citing lower beef prices and lower sales in its pork division.
While soaring beef, chicken and pork prices boosted Tyson’s sales last year, the company reported an 8.5% drop in average beef sales during the quarter.
Apple (AAPL-US) fell 1.27% to $152.54
Apple has reportedly cut the price of its latest iPhone by more than $100 in China. Between February 5 and 15, retailers such as JD.com are cutting prices on the iPhone 14 Pro series by 800 yuan ($118). An Apple retailer in Shenzhen also started to cut the price of the same phone by 700 yuan.
Daily key economic data:
Wall Street Analysis:
Karl Chalupa, chief executive of Gamma Investment Consulting, said corporate earnings could deteriorate further as the economy slows later this year, and the bull market may not have started yet as stock prices have not corrected back to proper valuations.
He pointed out that, on average, a new bull market starts when stocks are undervalued by 25%. According to current valuations, the S&P 500 needs to fall below 3,500 points to reach fair value. It fell to around 2200 points.
Regarding the prospects of U.S. stocks, Goldman Sachs believes that regardless of fundamentals or technical aspects, the bullish market for U.S. stocks may continue. No matter how bearish the outside world is on U.S. stocks, Goldman Sachs believes that the S&P 500 still has room to rise, looking at 4300 points.