30 Aug 2022

​Last night, the three major U.S. stock indexes closed down in shocks throughout the day. As of the close, the Dow fell 0.57%, the Nasdaq fell 1.02%, and the S&P fell 0.67%. The yield on the 10-year U.S. Treasury bond rose 2.14% to close at 3.108%, a difference of about -32 basis points compared with the yield on the two-year Treasury bond. The fear index VIX closed up 2.54%. Brent crude closed up 3.99%. Spot gold closed down 0.03% at $1,737.54 an ounce. The dollar index remained high, closing at 108.78.

The three major stock indexes collectively opened lower. Commerzbank released an analysis report that the ECB's remarks are not enough to support the euro, the euro needs to be boosted by the European Central Bank to raise interest rates sharply. The euro has lingered near parity against the dollar despite ECB executive Schnabel saying that central banks must take "firm" action to fight inflation by raising interest rates. While some ECB policymakers want to discuss raising rates by 75 basis points next week, even that may not change the widely held view that the ECB is "far behind the curve," analysts said.

The U.S. labor market is likely to remain tight in August, but the Fed is expected to slow the pace of rate hikes to 50 percent next month, Bank of America economists said in a report on Fed Chairman Powell's speech at the Jackson Hole annual meeting. 1 basis points, the Fed is inclined to raise rates slightly if possible. The Fed is expected to cut the terminal interest rate to 3.5%-3.75% by December, and the U.S. economy is expected to have a hard landing. Economists also said that Fed tightening cycles tend to end in recessions, though not necessarily deep by historical standards.

Goldman Sachs expects European gas prices to remain high and volatile as the risk of winter gas shortages persists. This winter is likely to be colder than usual, and Russia's oil supplies may be reduced. Monday's slump in European benchmark gas prices was due to a lack of liquidity, but it was not a sign of a trend. Energy price caps discussed in Europe could exacerbate energy shortages because they do not address underinvestment on the supply side. If prices are low, people will just consume more, which will make things worse. The European Union will hold an energy emergency meeting on September 9 to prepare for emergency intervention in the electricity market. LNG giant Cheniere plans to expand gas exports in Texas.

U.S. ministers and U.S. allied leaders will meet in Germany on September 8 on Ukraine. Fed Vice Chairman Brainard said that the Fed will launch the "FED NOW" instant payment system between May and July 2023. The White House press secretary expects the jobs data to "cool."

Apple fell 1.37% as lawyers for the U.S. Justice Department are in the early stages of drafting an indictment against Apple.

Microsoft fell 1.07%. Microsoft and ByteDance will cooperate to dig deep into AI technology; at the same time, at the 2022 World New Energy Vehicle Conference, the overall solution for the automotive and mobility fields will be released for the first time.

Google fell 0.86%, launched a cross-device SDK, and Android applications will be able to run on Apple/windows devices.

Amazon fell 0.73% and will invest $100 million in Turkey to start a local logistics center and recruit more than 1,000 employees.

Tesla fell 1.14% after Musk, speaking at the ONS conference in Norway, said he hoped to announce the location of another Tesla factory later this year, and hoped to have Tesla's wide release in the U.S. by the end of the year. Self-driving cars are expected to be launched in Europe.

Meta fell 1.61% and will launch a grocery shopping service on WhatsApp with India's Jio Platforms.

Sources from: Investing.com; Reuters.com

Louis Yap

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