12 Dec 2022

• Last friday, the three major U.S. stock indexes continued to fluctuate, and the decline expanded in late trading. The energy and new energy vehicle sectors generally fell. As of the close, the Dow fell 0.9%, the Nasdaq fell 0.7%, and the S&P fell 0.73%. The yield on the 10-year U.S. Treasury bond rose 3.012% to close at 3.591%, a difference of -76 basis points compared to the yield on the two-year Treasury bond. The panic index VIX rose 2.42%. Brent crude oil closed up 0.17%. During the session, the Keystone oil pipeline on the U.S.-Canada border was closed due to a leak, pushing the two oils to continue to rise. Spot gold closed up 0.46% at $1,797.34 an ounce. The U.S. dollar index remained high, closing at 104.94.
• The latest PPI data released by the U.S. Department of Labor on Friday showed that the annual rate recorded 7.4%, an increase slightly higher than the expected 7.2%. At the same time, it raised the October value, which coincided with the Fed’s interest rate decision. The Fed is in the fastest pace since the 1980s During the rate hike cycle. According to last week's ISM report, the price index of factory purchases fell to a two-and-a-half-year low in November, but the transfer of consumption to the service industry means that overall inflation will remain high for a period of time. Some price pressure is thought to be coming from the labor market, with wage growth accelerating in November. That has led economists to expect the Fed to continue tightening monetary policy and raise the policy rate above a recent forecast of 4.6 percent and likely to remain there for some time.
• EU foreign ministers plan to approve new sanctions on Russia and Iran at their Dec. 12 meeting, EU sources said. Russian President Vladimir Putin said that he will decide whether to increase oil production after Q1 after the introduction of the price cap, and Russia may cut oil production as part of the countermeasures against the oil price cap, which will be issued in a few days, The Russian deputy foreign minister confirmed that representatives of Russia and the United States met in Turkey, but said that this contact at the level of relevant departments is not a political signal of the restoration of Russian-American relations. Putin said in this regard: It was US President Biden who made the suggestion and will continue to maintain contact. According to the Platts survey published by S&P Global Commodity Watch, OPEC+ oil production fell by 700,000 barrels per day in November.
• The initial value of the University of Michigan consumer confidence index in the United States in December was 59.1, expected 56.9, and the previous value was 56.8. According to the analysis of the director of consumer surveys at the University of Michigan: Consumer confidence rose 4% from November, recovering most of the decline in November, but still at a low level from a historical perspective. All components of the index rose, with one-year business conditions surging 14% and longer-term business conditions a smaller gain of 6%. Confidence rose across multiple demographic groups, with gains being particularly large among higher-income households and households with large stock holdings, underpinned by recent gains in financial markets. Confidence among Democrats and independents rose 12 percent and 7 percent, respectively, while Republicans fell 6 percent. Concerns about high prices remained high throughout the survey, but have eased slightly. According to the Fed’s Quarterly Financial Accounts Report: In 22Q3, the market value of the stock market fell by US$1.9 trillion, and the net assets of US households fell to US$143.3 trillion.
• The U.S. one-year inflation rate in December is expected to be 4.6%, the lowest since September 2021, and is expected to be 4.9%, compared with the previous value of 4.9%. According to the analysis of the director of consumer surveys at the University of Michigan: Inflation expectations for the coming year have improved significantly, but are still relatively high, falling to 4.6% from 4.9% in December, the lowest level in 15 months, but still well above two level of previous years. The decline in short-term inflation expectations is evident across the distributions of age, income, education, and political party identification. Longer-term inflation expectations have remained in a narrow (albeit rising) range of 2.9-3.1% for 16 of the past 17 months and are currently at 3%.
• Apple fell 0.34%. It was reported that Apple plans to cut off the iPad Mini product line with a screen size of less than 10 inches in 2025 and launch a foldable iPad product line instead; reached a multi-year global patent licensing agreement with Ericsson and reached a settlement on patent disputes.
• Microsoft fell 0.8% to acquire Lumenisity, a British hollow-core fiber manufacturer.
• Amazon fell 1.39%, following the example of TikTok and launching Inspire to accelerate video social shopping.
• Tesla rose 3.23%. According to reports, Tesla will suspend the production of Model Y at the Shanghai factory from December 25 to January 1. Tesla's suspension of production will make the monthly production of Model Y in December higher than that in November Reduced by about 30%.
• Meta rose 0.49%. After the major layoffs, Meta will sublease part of the office space of its European headquarters in Dublin; Meta's second antitrust lawsuit opens: it is accused of using mergers and acquisitions to dominate the Metaverse.

Sources from: Investing.com; Reuters.com

Louis Yap

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