17 Nov 2022

Last night, the three major U.S. stock indexes fluctuated and closed down. As of the close, the Dow fell 0.12%, the Nasdaq fell 1.54%, and the S&P fell 0.83%. The U.S. 10-year Treasury yield fell 2.094% to close at 3.694%. Compared with the two-year Treasury yield spread, it further widened to about -67 basis points. The degree of inversion between the U.S. 2-year and 10-year Treasury yield curves hit a new record. The fear index VIX fell 1.75%. Brent crude oil closed down 1.08%. Spot gold closed down 0.26% at $1,773.7 an ounce. The U.S. dollar index remained high, closing at 106.33.

The Polish missile crisis has weakened market risk sentiment. The latest responses from the five parties to the incident: ① The Polish president stated that the missile is very likely to have come from the Ukrainian air defense system and gave up activating Article IV of NATO. ②Zelensky stated that the missiles that landed in Poland did not belong to Ukraine; Ukraine advocated a joint investigation into the incident. ③The Russian Ministry of Defense stated that the wreckage of the missile found in Poland was identified as a component of the Ukrainian S-300 air defense missile. ④ The United States agrees with Poland's initial assessment of the missile explosion. ⑤ NATO Secretary General: The missile incident is not Ukraine's fault, and there is no indication that it was the result of a deliberate attack.

G20 Declaration: Most members strongly condemn war, do not allow the use or threat of use of nuclear weapons, and uphold international law and maintain a peaceful and stable multilateral system is of paramount importance. Since July 1, Ukrainian grain exports have fallen by 31% year-on-year, the Ukrainian Agriculture Ministry said. Martial law and general mobilization in Ukraine will be extended for another 90 days until February 19 next year.

U.S. retail sales recorded a monthly rate of 1.3% in October, the largest increase since February 2022, expected to be 1%, and the previous value to be 0%. U.S. retail sales rose sharply in October, pointing to a strong economy. U.S. consumer spending has remained strong despite the Federal Reserve's measures to slow economic growth. Retail sales jumped 1.3% in October as consumers spent more on gasoline, food and big-ticket items such as furniture and cars. Retail sales have generally risen in recent months as rising prices and higher interest rates have made consumption, especially commodities, more expensive.

European Central Bank Governing Council Muller supports a substantial interest rate hike in December, hoping to reach an agreement on a quantitative tightening plan in December. Bank of England Governor Bailey said the UK is still likely to raise interest rates further. The European Commission backs Croatia, Romania and Bulgaria to join the Schengen area.

Fed George said that it may not be feasible to reduce inflation without a recession; the Fed should slow down the pace of raising interest rates and needs to continue to raise interest rates. Fed Daly said he wanted to see the economy slow down; the option of pausing interest rate hikes was not on the table; pausing interest rate hikes was not part of the discussion; and said that in September, 5% was considered the end point of interest rates, and 5% is still considered reasonable , the interest rate range of 4.75%-5.25% is reasonable; the unemployment rate is reasonable at 4.5%-5%. Fed Governor Waller said that the recent data made me more comfortable with the idea of ​​raising interest rates by 50 basis points in December; what makes me nervous is that companies are raising wages on a large scale. Economists at JPMorgan Chase believe that a Fed rate hike in 2023 will lead to a mild recession in the U.S. economy. The U.S. could lose more than 1 million jobs during a recession. According to CNBC: The Biden administration has warned that without debt relief, student loan defaults will hit record highs.

Apple fell 0.83%. The delivery time of Apple iPhone 14 Pro/Max was delayed by as much as 6 weeks, and American users could not receive the goods before Christmas; Cook said recently that he has decided to buy chips from a factory in Arizona and plans to Use "made in the United States" chips every year.

Microsoft rose 0.18%. Nvidia and Microsoft cooperated to build a cloud artificial intelligence supercomputer.

Google rose 0.27%. YouTube will introduce a shopping function to its short video platform Shorts as advertising revenue declines.

Amazon fell 1.84%, and issued a voluntary resignation proposal to some employees; the cloud computing department plans to invest 2.5 billion euros in Spain and set up 1,300 jobs in Spain.

Tesla fell 3.86%, and will hold a Semi truck delivery ceremony at the Nevada factory on December 1; Tesla recalled 1,012 vehicles in Australia due to steering system failures that may increase the risk of accidents; Tesla China shortened Model 3 and The delivery time of Model Y is as short as one week; the National Highway Traffic Safety Administration (NHTSA) said that Tesla disclosed to the agency two fatal car accidents a few days ago, and said that they were all related to the automatic driving assistance of Tesla Model 3 cars. system related.

Broadcom fell 2.42%. It has sought approval from the European Union for its $61 billion acquisition of cloud computing company VMware, striving to pass the antitrust review.

Qualcomm fell 4.2%, launching a new flagship mobile platform, the second-generation Snapdragon 8. Target fell 13.14%, Q3 profits cut in half, and operating profit margins were lower than expected. The company lowered its fourth-quarter performance expectations and sought cost reductions of up to $3 billion.

General Motors fell 4.4%. According to insiders, GM will sell about 44,000 electric vehicles this year, and the electric vehicle business is expected to be profitable in 2025; it is reported that Nel, the world's largest hydrogenation supplier, is cooperating with General Motors to produce renewable hydrogen .

Micron fell 6.7%. Compared with the fourth fiscal quarter of fiscal year 2022, it will reduce the operating rate of DRAM and NAND flash wafer production by about 20%; it is expected that the year-on-year growth of DRAM chip supply in fiscal year 2023 will be negative, and the supply of NAND flash memory will increase year-on-year is a single digit.

Nvidia once rose by more than 3% after the market. Benefiting from the strong demand for core business data centers, the decline in Q3 revenue eased more than expected.

Sources from: Investing.com; Reuters.com

Louis Yap

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