On January 5th local time, the three major US stock indexes closed slightly higher, with the Dow Jones up 0.07%, the S&P 500 up 0.18%, and the Nasdaq up 0.09%. The three major stock indices all recorded a decline this week, ending the previous record of nine consecutive weeks of gains.
In terms of individual stocks, Apple's stock price has fallen for five consecutive trading days, with a decline of 5.9% since 2024. In the first week of the new year, it evaporated over $176.5 billion in market value (approximately RMB 1260 billion). For Apple, it has faced three major bearish conditions this week. Firstly, two Wall Street agencies downgraded Apple's stock rating due to concerns about the future of the iPhone. On Friday, there were reports that multiple insiders said the US Department of Justice was close to filing an antitrust lawsuit against Apple, and could file a lawsuit as early as the first half of this year.
It is worth noting that after consecutive declines, the market values of Apple and Microsoft are now very close, with a difference of only about $85 billion, accounting for about 3% of Apple's total market value. If Apple continues to decline, the position of the "stock king" in the US stock market may return to Microsoft's hands.
Non agricultural data exceeded expectations significantly
According to data released by the US Department of Labor on the 5th, the number of non farm workers in the United States increased by 216000 in December 2023, with an expected increase of 175000, compared to a previous increase of 199000. The average hourly wage in the United States increased by 4.1% year-on-year in December 2023, with an expected increase of 3.9%. The number of non farm employment in the private sector increased by 164000, compared to 136000 in the previous month; Expected to increase by 130000 people. The unemployment rate in the United States in December 2023 was 3.7%, lower than market expectations and consistent with the previous month. The employment numbers in the government, healthcare, social assistance, and construction industries continue to rise, while the employment numbers in the transportation and warehousing industries have decreased. The unemployment rates of adult males (3.5%), adult females (3.3%), adolescents (11.9%), whites (3.5%), blacks (5.2%), Asians (3.1%), and Latinos (5.0%) remained almost unchanged in December among the main working population. In 2023, the number of employed people increased by 2.7 million (an average monthly increase of 225000 people), which is lower than the growth of 4.8 million people in 2022 (an average monthly increase of 399000 people).
In addition, the total number of non-agricultural employment in October 2023 was revised from 150000 to 105000, a decrease of 45000 people; The total number of non-agricultural employment in November was revised from 199000 to 173000, a decrease of 26000. After these revisions, the employment figures for October and November 2023 decreased by 71000 compared to the previously released data.
Analysis suggests that employment growth in the United States accelerated in December 2023, with wage increases exceeding expectations, reducing the likelihood of the Federal Reserve lowering interest rates in March.
After the release of non farm payroll data, short-term interest rate futures traders in the United States have reduced their bets on the Federal Reserve's rate cut; At the same time, swap prices show a 50% chance of the Federal Reserve cutting interest rates in March 2024.
"For those who expect the Federal Reserve to cut interest rates six times starting from March this year, today's data is a reality test. We can nitpick on the two month revised data and labor force participation rate, but the increase in monthly hourly wages is undoubtedly not conducive to a significant rate cut," said Steve Sosnick, Chief Strategist at Yingtou Securities
Jeffrey Sherman, Deputy Chief Investment Officer of DoubleLine Capital, previously stated that Wall Street's expectation that the Federal Reserve would cut interest rates as early as March was too optimistic.
According to the minutes of the Federal Reserve's December 2023 meeting, most Fed officials hope to maintain high interest rates for a period of time, which has intensified doubts about whether the Fed is prepared to start cutting rates as early as March.
Despite the resilience of the US economy last year, strong economic growth, low unemployment rates, and a decrease in inflation, Sherman pointed out that the US economy has not yet emerged from the dark clouds of recession, especially if inflation is reignited or the Federal Reserve maintains interest rates at higher levels for a longer period of time. He pointed out that the yield curve of US treasury bond bonds is still upside down, which usually indicates economic recession. Sherman said, "Looking ahead to 2024, there is still a risk of economic recession. I believe that ultimately, it will depend on how the job market unfolds."
US stocks closed slightly higher with Tesla recalling again
On January 5th local time, the three major US stock indexes closed slightly higher, but all recorded declines this week, ending the previous record of nine consecutive weeks of gains. As of the close, the Dow Jones Industrial Average was at 37466.11 points, up 0.07%; The S&P 500 index closed at 4697.24 points, up 0.18%; The Nasdaq rose 0.09% to 14524.07 points. The Dow Jones Industrial Average has fallen 0.59% this week, the S&P 500 has fallen 1.52%, and the Nasdaq has fallen 3.25%.
Tom Lee, Global Research Director at Fundstrat Global Advisors, interpreted that the first four trading days of 2024 were a bad start for the stock market. And the trend of the year often manifests in January. "This means that the turbulence in the US stock market this week tells us to prepare for a challenging year."
Large tech stocks have fluctuated, with Nvidia up over 2%, Facebook parent company Meta up over 1%, and Amazon and Intel slightly up; Apple, Tesla, Microsoft, and Google A saw a slight decline.
Tesla's stock price has fallen for six consecutive trading days, with the company recalling over 3.6 million electric vehicles within a month. According to the State Administration for Market Regulation, Tesla (Shanghai) Co., Ltd. and Tesla Motors (Beijing) Co., Ltd. have filed a recall plan with the State Administration for Market Regulation in accordance with the requirements of the Regulations on the Management of Defective Automotive Product Recalls and the Implementation Measures of the Regulations on the Management of Defective Automotive Product Recalls.
From now on, over 1.6 million imported Model S, Model X, Model 3, and domestically produced Model 3 and Model Y electric vehicles with production dates between August 26, 2014 and December 20, 2023 will be recalled.
According to the announcement, for vehicles within the scope of this recall, when the automatic assisted steering function is activated, the driver may misuse the level 2 combination driving assistance function, increasing the risk of collision and posing a safety hazard. Tesla Motors (Beijing) Co., Ltd. and Tesla (Shanghai) Co., Ltd. will use OTA technology to promote newly developed features for vehicles within the recall scope, including adding additional automatic assisted steering control and related prompts, further encouraging drivers to fulfill their driving responsibilities and comply with driving regulations when using this function, in order to reduce the risk of collisions caused by misuse of the assisted steering function.
On the 13th of last month, Tesla also recalled approximately 2.03 million cars in the United States. The recall notice mentions that in some cases, the Autopilot function of Tesla's assisted driving system, along with its accompanying control and alarm functions, may not be sufficient to prevent driver misoperation. This OTA update will incorporate additional controls and alarms, requiring drivers to still take on driving responsibility when activating autonomous driving functions.
Large bank stocks generally rose, Bank of America rose nearly 2%, Citigroup, Morgan Stanley, UBS, and Wells Fargo rose more than 1%, while JPMorgan Chase and Goldman Sachs rose slightly.
Popular Chinese concept stocks generally fell, with the Nasdaq China Golden Dragon Index falling 1.80% and a cumulative decline of 4.20% this week. In terms of individual stocks, Xiaopeng Automobile fell more than 5%, Bilibili and NetEase fell nearly 5%, Vipshop fell nearly 4%, Weibo, Ideal Automobile, NIO, and Alibaba fell more than 2%, JD.com, Tencent Music, Futu Holdings, and iQiyi fell more than 1%, while Pinduoduo, Manbang, and Baidu fell slightly.
Is the position of Apple's "stock king" not guaranteed to be bearish on three days a week?
Apple's stock price has fallen for five consecutive trading days, with a decline of 5.9% since 2024.
On Friday, it was reported that multiple insiders reported that the US Department of Justice is close to filing an antitrust lawsuit against Apple, with the earliest possible filing date being in the first half of this year. The report states that the US Department of Justice is focused on the entire Apple ecosystem: how Apple utilizes its control over hardware and software to make it harder for consumers to abandon the company's devices and for competitors to compete. The focus of the investigators includes better performance of Apple Watch when paired with iPhone, closed iMessage service, and payment system.
In addition, in the first week of the new year, Apple has been downgraded by two securities research institutions.
On Tuesday, Barclays downgraded Apple's stock rating from holding to low allocation in a report, marking the first time the bank has downgraded Apple to this rating since 2019. Meanwhile, lowering Apple's target price to $160 means that Barclays expects Apple's stock price to drop by about 17% over the next year from last Friday.
On Thursday, due to the belief that a weak macro environment would suppress demand for iPhones, Harsh Kumar, Chief Analyst at Piper Sandler, downgraded Apple's rating from over equipped to neutral in a report. However, Piper Sandler has set a target price of $205, which is about 11% higher than Wednesday's closing price, indicating that there is still 11% room for Apple's stock price to rise.
It is worth mentioning that the market value difference between Apple and Microsoft is currently only 3%. If Apple continues to decline, the position of the "stock king" in the US stock market may be handed over to the AI trendsetter Microsoft. Microsoft won the world's highest market value company title for the first time in 1998. In 2010, with the emergence of the iPhone, Apple surpassed Microsoft in market value and became the world's largest technology giant for the first time. In recent years, Apple and Microsoft have taken turns becoming the world's most valuable companies.
However, Microsoft has also been in trouble recently. On Friday local time, OpenAI and Microsoft were once again sued for AI copyright issues. Two writers (Nicholas Basbanes and Nicholas Gage) filed a class action lawsuit against OpenAI and Microsoft in the Manhattan federal court. They accused these two companies of "simply stealing" the copyrighted works of the authors in order to establish artificial intelligence systems worth billions of dollars.
Yellen Sings Over the US Economy: Achieving a Soft Landing
US Treasury Secretary Janet Yellen said on Friday that the US economy has achieved a long sought after soft landing, which is unusual and even rare in history. In this situation, high inflation has been suppressed, but there has been no serious economic slowdown.
Yellen told the media, "I think what we are seeing now can be called a soft landing, and I hope this situation can continue."
Regarding the data released by the US Bureau of Labor Statistics on that day, Yellen pointed out that wage increases exceeded price increases, indicating that American workers are achieving success, and the progress of middle-income families is very significant.
Yellen also stated that some surveys have begun to show that the American people have become more optimistic. People need to go through a period of sustained low inflation and wage increases in order to be satisfied with their future prospects.
Yellen declined to comment on when the Federal Reserve should cut interest rates, but she stated that the Federal Reserve has handled monetary policy well. "The trends in the labor market, overall economy, and inflation indicate that they have made a series of wise decisions."
PepsiCo is blocked by Carrefour! Latest response
The global supermarket giant Carrefour and PepsiCo collapsed.
On January 4, local time, Carrefour told customers from four European countries that it would no longer sell Pepsi Cola, Lay's potato chips, 7Up and other products, because the cost of these products to Carrefour was too high in a recent price war.
It is reported that the spokesman of the French supermarket said that since Thursday, the Pepsi Cola product shelves of Carrefour stores in France, Italy, Spain and Belgium will be pasted with slogans, saying that "because the price rise is unacceptable", the store will no longer purchase these brand products.
PepsiCo said in a statement: "We have had discussions with Carrefour for several months, and we will continue to work in good faith to ensure our product supply." PepsiCo said in October last year that due to rising demand, it planned to raise prices "slightly", leading it to raise its profit forecast for 2023 for the third time in a row. Prior to this, PepsiCo had raised prices for seven consecutive quarters.
On January 5th, PepsiCo's stock market closed down 1.48%.