On March 8th local time, the three major US stock indexes rose and fell collectively, with the S&P 500 index and Nasdaq hitting new historical highs in early trading, followed by a volatile decline, with the Nasdaq falling more than 1%. As of the close, the Dow Jones Industrial Average fell 0.18%, the S&P 500 Index fell 0.65%, and the Nasdaq fell 1.16%. The February non farm payroll data in the United States was mixed, and the increase in unemployment rate strengthened market expectations for the Federal Reserve to start cutting interest rates in June.
The technology sector led the decline, with Nvidia plummeting 5.55% and ending its seven consecutive gains, marking the largest daily decline since May 2023; In the morning, it surged 5%, setting a new historical high in the market. The stock price climbed as high as $974 per share, and the total market value briefly approached Apple. In addition, Broadcom fell nearly 7%, Asma fell more than 5%, and Intel fell more than 4%.
Most popular Chinese concept stocks rose, with the Nasdaq China Golden Dragon Index rising 0.71%. Manbang rose by over 7%, Bilibili rose by 5%, iQiyi rose by over 4%, JD.com rose by over 3%, Alibaba and others rose by over 1%.
February's non-agricultural employment data is mixed
The increase in non farm employment in the United States in February exceeded expectations, but the unemployment rate unexpectedly increased and wage growth slowed down, further indicating signs of healthy economic growth and slowing inflation.
Specifically, the non farm payroll in the United States increased by 275000 people in February, a new low since November 2023, with an expected increase of 200000 people, compared to an increase of 353000 people. The unemployment rate in the United States in February was 3.9%, a new high since January 2022, with both expected and previous values at 3.7%.
The average hourly wage of employees continued to rise in February, with a month on month increase of 0.1% to $34.57, lower than the expected 0.3% and previous value of 0.60%. In the past 12 months, the average hourly salary of employees has increased by 4.3%, which is 0.2 percentage points narrower than in January. In February, the labor force participation rate reached 62.5% for the third consecutive month, and the employment rate remained at 60.1%, almost unchanged from a year ago.
In addition, the number of new non-agricultural employment increased from 333000 to 290000 in December last year; In January this year, the number of new non-agricultural employment decreased from 353000 to 229000. After these revisions, the total number of new jobs added in December last year and January this year decreased by 167000 compared to before the revision.
The US Bureau of Labor Statistics states that employment growth has occurred in healthcare, government, food services and catering establishments, social assistance, and transportation and warehousing sectors. The unemployment rates of adult women (3.5%) and adolescents (12.5%) are on the rise among the main working population. The unemployment rates for adult males (3.5%), whites (3.4%), blacks (5.6%), Asians (3.4%), and Latinos (5.0%) remained almost unchanged in February.
After the release of non-agricultural data, the US dollar index fell in the short term, reaching as low as 102.39, and then rebounded slightly; US treasury bond bond yields hit the lowest level since February 2 in the session; The international gold price hit a new historical high, with the most active April gold futures market on the New York Mercantile Exchange rising $20.3 on the 8th to close at $2185.5 per ounce, an increase of 0.94%.
Analyst Ira Jersey commented that the interest rate market may be concerned about rising unemployment rates and previous downward revisions. Although the labor market is far from weak, there are also signs of cracks, which may strengthen market expectations for the Federal Reserve to cut interest rates in the middle of the year.
Analyst Chris Anstey believes that the February non farm payroll report in the United States is a relatively weak report. Considering the downward correction of the data in the first two months, the actual number of new non-agricultural employment was lower than expected. Combining the weak hourly wage growth rate (monthly rate only 0.1%) with the rise in unemployment rate, this report indicates that the explosive growth in January was indeed somewhat abnormal.
John Brady, Executive Director of Chicago Futures Brokerage RJO Brien, said that the employment report provides "quite complex data," with "some details appearing quite weak," and weak wage data "favorable for inflation prospects.".
Richard Flynn, Managing Director of Credit Suisse UK, stated that he expects some volatility in the stock market in the coming days as investors respond to stronger than expected data. But from a broader perspective, these data are unlikely to cause significant damage. At the beginning of the year, the market expected a maximum of 7 interest rate cuts, but the economic data released since then has eased expectations for interest rates. The latest non farm payroll report can be seen as supporting an updated and more conservative expectation of three interest rate cuts in 2024- interestingly, this is exactly what the Federal Reserve has been predicting.
After the release of the non farm payroll report, traders still believe that the Federal Reserve will start cutting interest rates in June, with a probability of about 30% starting in May. The swap market is fully priced, and the Federal Reserve will cut interest rates by 25 basis points in June.
According to the Chicago Mercantile Exchange's Federal Reserve observation tool, the probability of the Federal Reserve maintaining interest rates unchanged at 5.25% -5.50% in March is 97.0%, and the probability of a 25 basis point rate cut is 3.0%. The probability of maintaining interest rates unchanged by May is 71%, and the probability of a cumulative 25 basis point rate cut is 28.2%.
Chicago Fed Chairman Goolsby said he expects policymakers to lower interest rates this year as inflation further cools. Gullsby previously stated in an interview that inflation improved significantly last year, but the Federal Reserve needs to restore it to its target of 2%. "As inflation decreases, the degree of interest rate constraint will weaken." Gullsby said that the Federal Reserve cannot change its target of 2% until inflation falls back to 2%. The Federal Reserve focuses on inflation rates rather than price levels. Gullsby's speech was the last planned speech by Federal Reserve officials before entering the "silent period" of the March meeting.
The day before, Federal Reserve Chairman Powell testified in the US Senate that the Fed is not far from confident in cutting interest rates and is well aware of the risk of cutting rates too late. If the inflation trend meets expectations, interest rate cuts will begin within this year.
US stocks closed lower, Nvidia jumped after hitting a high
On March 8th local time, the three major US stock indexes rose and fell collectively, with the S&P 500 index and Nasdaq hitting new historical highs in early trading, followed by a volatile decline, with the Nasdaq falling more than 1%. As of the close, the Dow Jones Industrial Average was at 38722.69 points, a decrease of 0.18%; The S&P 500 index closed at 5123.69 points, a decrease of 0.65%; The Nasdaq dropped by 1.16% to 16085.11 points.
In terms of sectors, the 11 major sectors of the S&P 500 index fell 6, remained flat, and rose 4. The technology sector and essential consumer goods sector led the decline with declines of 1.84% and 0.83%, respectively. The real estate sector and energy sector led the rise with gains of 1.13% and 0.39%, respectively. The communication services sector closed flat.
Large tech stocks generally fell, with Broadcom falling nearly 7%, Nvidia and Asma falling more than 5%, Intel falling more than 4%, Tesla and AMD falling nearly 2%, Facebook parent company Meta falling more than 1%, Amazon and Microsoft falling slightly; Apple rose more than 1%, while Google A saw a slight increase.
Nvidia plummeted by 5.55% and stopped rising for 7 consecutive days, marking the largest daily decline since May 2023, with a total market value of $2.19 trillion; In the morning, it surged 5%, setting a new historical high in the market. The stock price climbed as high as $974 per share, and the total market value briefly approached Apple.
Since 2024, Nvidia's market value has increased by nearly $1 trillion this year, making its stock price much higher than the previous split. Some people believe that Nvidia is currently in a very favorable position to split its stocks again.
Nvidia's last announcement of a stock split was in May 2021, during which it carried out a "one split four" of the company's stock. At that time, Nvidia's stock price was $600.
Ken Mahoney, President and CEO of Mahoney Asset Management, said, "I expect Nvidia to split its stocks in the next year or so, which will attract some retail investors to buy stocks they believe are currently inaccessible."
Regarding Nvidia's seven consecutive gains, Sam Stovall, Chief Investment Strategist at CFRA Research, said, "This does not mean that the long-term upward potential has come to an end. It is just saying that we may have been a bit rushed, we have reached the point of overbought, it is time to give back some profits."
Apple rose 1.02%, with a total market value of $2.64 trillion. On the news page, Apple China's official website has quietly updated the compatibility descriptions of numerous accessory products, adding the words "AppleVisionPro" to them. The outside world sees this as a signal that VisionPro is about to officially enter the Chinese market. Not only that, "AppleVisionProCompatibility" is also listed alongside options such as Mac compatibility, iPad compatibility, and iPhone compatibility in the compatibility categories of different hardware products. Previously, it was reported that VisionPro, a highly anticipated product by Apple, may only be released in countries and regions outside of the United States before the 2024 Apple Global Developers Conference, around May this year.
Tesla fell 1.85%, with a total market value of $558.4 billion. On the news side, Michaela Schmitz, the head of Tesla's German factory labor committee, announced on Friday that the factory will resume operations next week. Previously, Tesla's German super factory was shut down due to power outages caused by a fire.
New York Community Bank fell 6.56%. Moody's, an international rating agency, has stated that it has changed its review direction for New York Community Bank from downgrade review to upgrade review. The previous day, the New York Community Bank announced that it had received over $1 billion in equity investments.
Coinbase, a digital currency concept stock, closed up 5.77%, CleanSpark up 13.58%, Applied Digital up over 10%, and MicroStrategy up over 9%. Previously, Bitcoin broke through the $70000 mark and reached a historic high.
Most popular Chinese concept stocks rose, with the Nasdaq China Golden Dragon Index rising 0.71%. Manbang rose by over 7%, Bilibili rose by 5%, iQiyi rose by over 4%, JD.com rose by over 3%, Futu Holdings, Tencent Music, Alibaba rose by over 1%, Xiaopeng Motors, NIO, Baidu, Ctrip and other companies rose slightly; Pinduoduo fell nearly 6%, Vipshop fell more than 1%, and Ideal Automobile saw a slight decline.
Weight loss medication "Shuangxiong" both fell by more than 2%
The weight loss drug "Twin Heroes" weakened, with Lilly and Novo Nordisk both falling more than 2%. On the news front, Lilly announced on Friday that the US Food and Drug Administration (FDA) has unexpectedly postponed its approval decision for its new Alzheimer's disease drug donanemab and will convene an external expert meeting to discuss the safety and efficacy of its drug. Lilly stated that the date for the FDA Advisory Committee meeting to discuss donanemab has not been determined yet, but it may take several months, so it is expected that the approval time will be postponed to after the first quarter.
According to foreign media reports, Novo Nordisk has announced that the FDA has approved the scope of application of Wegovy, which can now be used to reduce the risk of serious adverse cardiovascular events. According to the results of the SELECT cardiovascular clinical trial, Wegovy showed significant statistical significance, reducing the risk by 20% compared to the placebo control group.
Previously, Novo Nordisk held the Capital Markets Day (CMD) event. At the event, Novo Nordisk revealed that it is expected that Wegovy will be approved for launch in China this year, and this product will initially focus on self funded patients with a quantity limit.
Wegovy is the trade name for the slimming indication of Smegglutide developed by Novo Nordisk. It was approved by the US Food and Drug Administration (FDA) as a weight loss drug in 2021 and is currently the most popular weight loss drug product in the world. In April 2021 and January this year, the other two products of Smeglutide - Smeglutide injection Ozempic and Smeglutide tablet Rybelsus for type 2 diabetes have been approved for marketing in China respectively.
Last month, Wegovy was officially approved in Japan, making it the first Asian country to receive approval. Previously, Wegovy had already been approved in 8 countries.