On Tuesday, January 23rd local time, the US stock market experienced mixed gains and losses, with the S&P 500 index not only reaching a new historical closing high, but also recording four consecutive gains along with the Nasdaq. Large tech stocks generally rose, with Apple rising for four consecutive trading days, breaking the closing high since December 21, 2023. The disappointing financial reports of several companies, including 3M, have put pressure on the stock price trend.
China's asset boom. The onshore RMB rose more than 200 basis points against the US dollar in the previous trading day, and the Nasdaq China Golden Dragon Index rose more than 6% at one point. The FTSE A50 futures index closed up 0.89% in consecutive overnight trading.
Asset explosion in China
Several popular Chinese concept stocks followed the upward trend of Tuesday's A-share market and experienced a strong rebound, performing far better than the overall market. The Nasdaq China Golden Dragon Index (HXC) rose more than 6% at the beginning of trading, closing up 4.84%, the largest daily increase since July 28, 2023, ending the previous six trading days of continuous decline. On Monday, it hit a low in over a year.
In terms of constituent stocks, Atlas Solar rose more than 14%, Lexin rose more than 10%, Dada Group, Lujinsuo Holdings, Bilibili rose more than 9%, Xiaoniu Electric, Wanguo Data, Baozun E-commerce, and Jinsheng Youle rose more than 8%, Alibaba, NetEase, Baidu, and JD.com rose more than 7%, Huazhu rose more than 5%, Beike, Yum China, and Xiaopeng Motors rose more than 4%, NIO, Zhongtong Express, Ideal Automobile, and Ctrip Group rose more than 3%, Tencent Music Vipshop will increase by over 1%.
Alibaba jumped short and opened high, up 7.87%, the highest daily increase since July 7, 2023. On the news page, a 13F document on the website of the US Securities Regulatory Commission shows that Blue Pool, a family fund of Tsai Chongxin, has increased its holdings of Alibaba stocks worth $150 million. According to media reports, Jack Ma also made a significant increase in his holdings of Alibaba stocks during the same period, but did not disclose the amount of the increase.
The onshore Chinese yuan continued to rise against the US dollar during trading. The data shows that the onshore RMB has risen by over 200 basis points against the US dollar compared to the previous trading day.
The FTSE China A50 futures index rose 0.89% in consecutive overnight trading, closing at 11045 points.
The S&P and Nasdaq have seen four consecutive increases
On January 23rd (Tuesday) local time, the three major US stock indexes fluctuated. The data shows that the Dow Jones Industrial Average fell 0.25%, the S&P 500 Index rose 0.29%, and the Nasdaq rose 0.43%. Among them, the S&P 500 index and Nasdaq recorded four consecutive gains, and the S&P 500 index hit a new historical closing high.
Large tech stocks generally rose. Among them, Apple rose 0.67% for four consecutive trading days, breaking the closing high since December 21, 2023. It is reported that Apple will hold a demonstration experience of the Apple Vision Pro on January 26th (Friday).
Amazon rose 0.8%, Netflix rose 1.33%, Google's parent company Alphabet rose 0.72%, Meta rose 0.9%, and Microsoft rose 0.6%. It is worth mentioning that Netflix's US stock market rose by over 8% after trading. According to the latest financial report released by Netflix, the company's earnings per share for the fourth quarter of 2023 were $2.11, with an expected earnings of $2.19; Revenue of 8.83 billion US dollars, expected to reach 8.71 billion US dollars; Net profit of 938 million US dollars, expected to be 977 million US dollars. In the fourth quarter, the net increase in paid streaming users was 13.12 million, with analysts expecting an increase of 8.91 million. Expected earnings per share for the first quarter of 2024 are $4.49, with analysts expecting $4.09; Revenue is 9.24 billion US dollars, with analysts expecting 9.28 billion US dollars.
Most US bank stocks rose, with JPMorgan Chase down 0.63%, Goldman Sachs down 1.35%, Citigroup up 0.87%, Morgan Stanley up 1.17%, Bank of America up 0.73%, and Wells Fargo up 1.2%.
However, JPMorgan Chase still maintains its bearish stance on the stock market. The bank pointed out in a report last Friday that "lackluster" profit results and high valuations mean investors should remain cautious when buying stocks at current levels.
A recent report from UBS shows that despite the US stock market soaring to a historic high, there is still a potential risk of a significant sell-off later this year. The bank emphasized the downward scenario of the stock market, where the S&P 500 index will plummet by 23% to 3700 points, slightly higher than the low point of the bear market in October 2022.
The three major European stock indices closed slightly lower. Data shows that as of the close, the DAX index in Germany fell 0.34%, the CAC40 index in France fell 0.34%, and the FTSE 100 index in the UK fell 0.03%.
3M fell nearly 11%
Several airlines, as well as major companies such as General Electric (GE) and 3M, have released their financial reports one after another, but most of them have been disappointing.
3M Company closed down 10.93%, the largest daily decline since March 2020. Although the company's Q4 2023 performance was better than expected, its EPS profit guidance for 2024 was lackluster.
The data shows that 3M's sales in the fourth quarter of 2023 were $8 billion, a year-on-year decrease of 0.8%. After quarterly adjustment, the sales were $7.7 billion, a year-on-year decrease of 0.3%; Adjusted earnings per share were $2.42, compared to $2.18 in the same period of 2022; The quarterly adjusted operating profit margin is 20.9%, compared to 19.1% in the same period of 2022. In addition, the company expects an adjusted annual sales growth rate of 0.25% to 2.25%; Expected adjusted earnings per share range from $9.35 to $9.75, lower than market expectations of $9.82.
General Electric fell 0.94%, although its net profit and revenue in the fourth quarter of 2023 exceeded expectations, its guidance for the first quarter of this year fell short of expectations.
General Electric (GE) released its results for the fourth quarter and full year of 2023, showing a total revenue of $68 billion, a year-on-year increase of 17%. In the fourth quarter of 2023, the net profit was $1.59 billion, a decrease of 24% year-on-year from $2.1 billion in the same period last year. The adjusted earnings per share were $1.03, higher than the expected $0.9. The total revenue of the company in the fourth quarter was 19.4 billion US dollars, a year-on-year increase of 15%, higher than the widely expected 17.27 billion US dollars. However, the outlook for General Electric's performance is not optimistic. For the first quarter of 2024, the company expects adjusted earnings per share to be between $0.6 and $0.65, which is generally lower than analysts' consensus expectation of $0.7.
Market insiders: The Federal Reserve may lower interest rates as early as March
The market is still evaluating the prospect of the Federal Reserve's interest rate cut.
Richmond Fed Chairman Barkin stated that it is not impossible for the Federal Reserve to cut interest rates in March and hopes to see inflation convincingly return to the Fed's target. He is not particularly opposed to normalizing interest rates at the appropriate time.
Goldman Sachs Chief Economist Jan Hatzius said on Tuesday that the Federal Reserve will begin cutting interest rates in March. He stated that the Federal Reserve is on the track to achieve a soft landing for the US economy, and added that the March interest rate cut is "meaningful.".
Hatzius said that the Federal Reserve's rate cut in March remains Goldman Sachs' basic expectation, as it will be in line with the trend of consumer prices, and Federal Reserve Chairman Powell stated last month that he hopes to cut rates before inflation returns to 2%.
Joshua Schiffrin, Global Trading Strategy Director at Goldman Sachs, previously stated that the Federal Reserve will start cutting interest rates from March and will cut rates four times this year, with inflation reaching the Fed's target of 2%.