On April 18th local time, investors waited for a new batch of corporate financial reports, and the three major US stock indexes rose and fell, closing with mixed gains and losses. On the other hand, the earlier released series of economic data were stronger than expected, coupled with the intensive voices of multiple Federal Reserve officials, further strengthening the market's expectation that the Federal Reserve is not in a hurry to cut interest rates. As of the close, the Dow Jones Industrial Average rose 0.06%, the Nasdaq fell 0.25%, and the S&P 500 index fell 0.52%. The Nasdaq and S&P 500 index have been falling for five consecutive trading days.
In terms of industry sectors, the eleven major sectors of the S&P 500 index rose seven times and fell four times. The communication services sector and the public utilities sector led the way with gains of 0.66% and 0.61% respectively, while the technology sector and non essential consumer goods sector led the way with declines of 0.89% and 0.71%, respectively.
Chinese concept stocks rose strongly, with the Nasdaq China Golden Dragon Index closing up 0.99%. Among popular stocks, New Oriental rose 2.77%, Tencent Music rose 2.75%, NIO rose 2.30%, Ideal Automobile rose 1.57%, and Baidu rose 1.24%.
After market hours, Netflix released its first quarter financial report for 2024, marking the beginning of the financial report for a US technology giant. The financial report shows that 9.33 million new subscribers were added in the first quarter, exceeding expectations for the second consecutive quarter. The revenue for the quarter was $9.49 billion, with analysts expecting $9.537 billion. Earnings per share was $5.28, compared to $2.88 in the same period last year.
As of the time of publication, Netflix's stock price fell 4.9% in after hours trading, and the stock closed down 0.41% overnight. The reason for the decline is believed to be that the revenue guidance for this quarter did not meet analyst expectations. Since the beginning of this year, Netflix's stock price has risen by a cumulative 25%, surpassing the cumulative 3.38% increase of NASDAQ 100 during the same period.
Tesla fell 3.55% to $132.27, closing at a new low since January 2023. On the 18th, Deutsche Bank downgraded Tesla's stock rating from "buy" to "hold" and lowered its target price from $180 per share to $123, citing significant risks for the company, particularly considering the uncertainty surrounding the launch of Model 2 and Tesla's shift in strategic focus towards Robotaxi.
On April 5th, Musk announced that Tesla will release the Robotaxi on August 8th, 2024, which is seen as an important move for Tesla to fully shift towards artificial intelligence and robotics technology.
Deutsche Bank analysts wrote in a report, "We believe that Tesla's transformation has changed market views and are concerned that its stock may need to go through the pain of shareholder group transformation. Investors who focus on Tesla's electric vehicle sales and cost advantages may choose to leave and ultimately be replaced by more long-term AI/technology investors."
TSMC's American Depositary Receipts (ADRs) fell 4.86%, and the company's consolidated revenue in the first quarter was RMB 132.455 billion, a year-on-year increase of 16.5% and a month on month decrease of 5.3%; The net profit was RMB 50.397 billion, a year-on-year increase of 8.9% and a month on month decrease of 5.5%. The gross profit margin for the quarter was 53.1%, the operating profit margin was 42.0%, and the net profit margin was 38.0%.
In addition, TSMC Chief Financial Officer Huang Renzhao stated at the meeting that the impact of the Hualien earthquake on the second quarter gross profit margin is 50 basis points, and it is expected that the increase in electricity bills from April will have a 70-80 basis point impact on the second quarter gross profit margin.
Alaska Airlines rose 4.03%, and the company expects profits to be higher than expected this quarter due to soaring demand as the summer tourism season approaches.
On the 18th, the US Department of Labor released data showing that as of the week ending April 13th, the number of initial jobless claims in the US was 212000, lower than the expected 215000, indicating that the cooling trend in the US job market is still slow.
The data released by the Philadelphia Federal Reserve on the same day showed that the growth rate of manufacturing activity in the central Atlantic region of the United States accelerated in April. In April, the manufacturing index in the region rose to 15.5, the highest level in nearly two years. Looking at the sub items, the price payment index surged by nearly 20 points to 23 points; The new order index increased by nearly 7 points to 12.2; The shipment volume index increased by nearly 8 points to 19.1.
New York Fed Chairman Williams said on Thursday that the Fed is not in a hurry to lower interest rates, and economic data will determine the timing. He said there is even a possibility of interest rate hikes this year.
"Monetary policy is in a good position. The current level of interest rates is gradually pushing us to achieve our goals. So I don't feel the urgency of lowering interest rates at all. I think monetary policy is accurately playing the role we want to see," Williams said.
Atlanta Fed Chairman Bostic stated that he tends to maintain interest rate stability and that rate cuts should wait until the end of the year. He said he still believes that the inflation rate is moving towards the Federal Reserve's target of 2%, but the pace may be slower than people's expectations.
Bostek has the voting power on monetary policy in the Federal Open Market Committee (FOMC) this year and has stated that he expects to only cut interest rates once this year.
JPMorgan Chase President Daniel Pinto said that given high inflation levels, the likelihood of the Federal Reserve not lowering interest rates this year is high. "The Federal Reserve may have to wait for a longer period of time before lowering interest rates, but the possibility of a rate hike is very, very low." Pinto also believes that the Federal Reserve is not in a hurry to take action at present, because cutting interest rates too early will bring pain and lead to an economic recession.
The market's expectations for the Federal Reserve's interest rate cut have significantly decreased, with the Chicago Mercantile Exchange (CME) FedWatch tool showing a probability of a rate cut dropping to 15.2% in June and 41.5% in July.
In terms of commodities, oil prices have slightly increased, with West Texas Intermediate Crude Oil (WTI) futures for May delivery on the New York Mercantile Exchange rising 4 cents to close at $82.73 per barrel, up 0.05%.