7 Dec 2022

Last night, the three major U.S. stock indexes continued to decline, and the energy, social media and semiconductor sectors generally fell. As of the close, the Dow fell 1.03%, the Nasdaq fell 2%, and the S&P fell 1.44%. The yield on the 10-year U.S. Treasury bond fell 1.341% to close at 3.531%, a difference of -84 basis points compared to the yield on the two-year Treasury bond. The panic index VIX rose 6.84%. Brent crude oil closed down 4.06%. Spot gold closed 0.12% lower at $1,771.02 an ounce. The U.S. dollar index remained high, closing at 105.57.

U.S. October trade account -$78.2 billion, expected -$80.0 billion, previous -$73.3 billion. The U.S. trade deficit widened sharply in October as slowing global demand and a stronger dollar weighed on exports. The dollar has appreciated more than 11% against the currencies of its major trading partners this year since the end of December 2021, the result of the Fed's fastest rate hike cycle since the 1980s to fight inflation. The narrowing of the trade deficit was one of the main factors behind the rebound in U.S. economic growth in the third quarter. The trade deficit widened sharply in October, suggesting trade could be a drag on GDP in the current quarter.

The Chicago Mercantile Exchange (CME) lowered the WTI crude oil margin for the January-August 2023 contract by US$500 to US$7,000. The Atlanta Fed's GDPNow model expects U.S. GDP to be 3.4% in the fourth quarter, up from an earlier estimate of 2.8%.

The RBA raised interest rates by 25 basis points to 3.10%, in line with market expectations. It is the eighth rate hike since May this year and the highest rate since November 2012. It is expected to raise interest rates in the coming period. Indonesia's sovereign wealth fund has signed an agreement with a Danish fund for a possible joint investment of up to US$500 million.

Russia is considering floor prices for oil sales in response to G7 oil price caps. The Russian Ministry of Defense stated that the Russian army defeated the Ukrainian counterattack and continued to advance smoothly in the direction of Donetsk. The European Union will propose a ban on new investment in Russia's mining sector. Hungary opposes the adoption by the European Council of legislative amendments that would allow Ukraine to receive 18 billion euros in macro-financial aid in 2023.

Apple fell 2.54%, reducing the scale of the self-driving car project and delaying its launch until 2026; Apple Pay was delayed in South Korea due to local reviews.

Microsoft fell 2.03%. From next year, new Xbox games will increase by about 16% to $70 to follow up the recent moves of companies in the same industry.

Google fell 2.56% as its technology incubator Jigsaw LLC launched a new anti-disinformation project in India to prevent the widespread dissemination of misleading information.

Amazon fell 3.03%, agreeing to a definitive agreement to end the EU antitrust probe.

Meta fell 6.79%, targeted advertising model faces restrictions in Europe.

Nvidia fell 2.75%. The company expects to use all of TSMC's fabs. At the same time, it is preparing for the price cut of the RTX4080 graphics card. The price cut is expected to be announced in mid-December. The final price may be close to AMD's upcoming RX 7900 XTX.

Intel fell 1.95%. It is ready to start producing 4nm process chips and plans to switch to 3nm process chips in the second half of next year.

Gitlab rose 9.44%, FY23Q3 revenue increased by 69% year-on-year, better than market expectations, and raised FY23 performance guidance. The auto zone fell 2.77%, FY23Q1 revenue increased by 8.6% year-on-year, and net profit decreased by 2.9% year-on-year, but it was better than market expectations.

Sources from: Investing.com; Reuters.com

Louis Yap

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