After the previously announced increase in US CPI hit interest rate cuts, the December 2023 PPI data released by the US Department of Labor on January 12 local time revived expectations. Investors have started to increase their bets on the Federal Reserve's interest rate cut starting in March. On that day, the three major US stock indexes closed with mixed gains and losses, while the Dow Jones fell 0.31%.
The escalation of the Red Sea conflict has contributed to a significant rebound in international crude oil prices. On the 12th, gold, a safe haven asset, rose more than 4% in intraday trading, and also made a strong comeback. It rose more than 2% in intraday trading, marking the best single day performance since last month's Federal Reserve meeting released a dovish turn signal.
Tesla has performed poorly, with its stock price falling. Market analysis suggests that Tesla is currently facing multiple pressures. This includes global supply chain issues, especially military conflicts in the Red Sea region, which have exacerbated the uncertainty of spare parts transportation.
On January 12th, Microsoft surpassed Apple to become the world's largest company by market value. Apple has been bearish again, and investment research firm Hedgeye has listed it as its latest short selling target.
The three major US stock indexes have mixed closing gains and losses
On January 12th local time, data from the US Department of Labor showed that the US PPI for December 2023 increased by 1% year-on-year, which was lower than the expected 1.3% and did not increase for the third consecutive month. The continuous cooling of the US PPI indicates that inflation will decrease in the coming months.
The three major US stock indexes closed with mixed gains and losses. As of the close, the Dow Jones Industrial Average fell 0.31% to 37592.98 points, the S&P 500 Index rose 0.08% to 4783.83 points, and the Nasdaq rose 0.02% to 14972.76 points.
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Barclays economists predict that the Federal Reserve will start cutting interest rates early based on this week's inflation data, with a predicted start date of March instead of June as they previously believed. Given the recent progress in inflation, the Federal Reserve will be confident in lowering interest rates without the need to see a significant weakening of the economy or labor market. The premise of this prediction is that the economy is gradually slowing down and the unemployment rate is slightly higher than the Federal Reserve's long-term estimate.
The US fiscal year 2024 saw a surge in deficit and interest rate pressure hit a new high since 1996, which may be the "profound meaning" of the Federal Reserve's early interest rate cuts.
According to a report released by the US Treasury Department on the 11th local time, the US federal government's fiscal deficit for the first quarter of fiscal year 2024 exceeded $500 billion, a year-on-year increase of 21%. The sharp increase in deficit has led to the total US government debt exceeding $34 trillion for the first time. Analysis predicts that if it continues at the current pace, the deficit in 2024 will exceed $2 trillion.
China International Capital Corporation (CICC) pointed out that high debt and rising interest rates in 2023 have put pressure on US fiscal interest payments to a new high since 1996, and the unexpected shift by the Federal Reserve may be due to this. Early interest rate cuts by the US government can save over $70 billion in interest annually.
Precious metals, rising international oil prices
This week, gold experienced a dramatic reversal, with a continuous decline in the first four days. On Friday, it launched a counterattack, wiping out the four-day decline and reaching a weekly high. The most active February gold futures market on the New York Mercantile Exchange closed at $2051.6 per ounce on the 12th, up 1.6%. On that day, the price of silver futures for March delivery closed at $23.329 per ounce, an increase of 2.75%; The price of platinum futures for April delivery closed at $921.1 per ounce, an increase of 0.16%.
On January 12th local time, crude oil rebounded significantly, with an intraday increase of over 4%. As of the close of the day, the futures price of light crude oil for February delivery on the New York Mercantile Exchange closed at $72.68 per barrel, an increase of 0.92%; The London Brent crude oil futures for delivery in March closed at $78.29 per barrel, an increase of 1.14%.
On January 12th local time, US energy stocks collectively rose, with ExxonMobil up 1.29%, Chevron up 1.36%, ConocoPhillips up 0.62%, Schlumberger up 2.36%, and Western Oil up 1.62%.
According to CCTV reports, the Yemeni Husai militants have confirmed that many parts of Yemen have been hit by US and British air strikes. Their spokesperson stated that the airstrikes lack legitimate reasons and that the Husai militants will continue to target ships related to Israel. After the airstrike, multiple oil tankers turned in the Red Sea, intensifying supply panic. Analysts believe that if the conflict spreads, it may threaten the entire trade route through the Persian Gulf, and oil prices will continue to rise.
Tesla plummets
On January 12th local time, Tesla closed down 3.67% and fell over 7.8% this week. On the news front, Hertz, the American car rental company that used to be Tesla's largest customer, announced that due to weak demand for electric vehicles, it will sell about one-third of its fleet of electric vehicles, about 20000 units, and purchase more gasoline vehicles. This, along with the news that Tesla suspended production at its Berlin factory in Germany after Red Sea shipping was blocked, jointly suppressed Tesla's stock price.
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HSBC analysts say that Tesla's demand for electric vehicles "seems to have stabilized.". Despite the company's outstanding performance in electric vehicle manufacturing, the factor affecting its market value is not car sales, but rather the unclear commercialization progress of Dojo supercomputers, FSD fully autonomous driving software, and the humanoid robot Optimus.
However, Morgan Stanley analyst Adam Jonas remains optimistic about Tesla, predicting that Tesla will deliver 2.25 million vehicles in 2024, an increase of approximately 25%.
US stock market leader changes ownership
On January 12th local time, investment research firm Hedgeye announced that it has listed Apple as its latest short selling target. Hedgeye predicts that Apple's revenue growth will be lackluster until 2025, as iPhone sales are weak, innovation is lacking, and Microsoft's artificial intelligence capabilities intensify competition in the personal computer market. Hedgeye also predicts that Apple's stock price will fall by 30% from its current level. After the announcement of this forecast, Apple's stock price, which had risen by 0.6% at the beginning of the trading session, turned lower, then rebounded slightly, and finally closed up 0.18%, with a market value of $2.87 trillion.
Eastern Wealth
Microsoft rose 1% to a market value of $2.89 trillion, surpassing Apple to become the world's largest company by market value.
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