On Friday local time, the three major US stock indexes experienced mixed gains and losses, with the Dow hitting a new historical high during trading, while the S&P and Nasdaq both ended their six consecutive daily gains. On a weekly basis, all three major indices recorded gains, with gains of 0.65%, 1.06%, and 0.94% respectively, and they also experienced three consecutive weekly gains.
The overall strength of the US stock market this week is mainly due to a series of better economic data performance: Thursday's US Q4 2023 GDP exceeded expectations, and Friday's release of the US core PCE price index cooled down beyond expectations.
On the market, chip stocks showed weak performance, leading the decline in the technology sector. Intel fell 11.91%, Gexin fell 4.77%, Microelectronics fell 3.05%, Qualcomm fell 2.43%, Chaowei Semiconductor fell 1.71%, and Nvidia fell 0.95%.
In terms of the situation in the Red Sea, CCTV News reported on the 26th local time by British media that a British oil tanker caught fire after being attacked by Houser militants while passing through the Red Sea. The company to which the oil tanker belongs, Tok Group, stated that earlier on the 26th, the Marin Luanda, an oil tanker operated by the company, was hit by a missile while passing through the Red Sea. Affected by this, international oil prices rose rapidly during the trading session, smoothing out a nearly 2% decline and ultimately closing higher on Friday. Since the beginning of this year, both WTI and Brent crude oil have risen by over 8%.
The S&P and Nasdaq end their six consecutive bullish streak, with Intel plummeting 12%
On Friday, January 26th local time, major US stock indices fluctuated. As of the close, the Dow Jones Industrial Average rose 0.16% to 38109.43 points, the S&P 500 Index fell 0.07% to 4890.97 points, and the Nasdaq fell 0.36% to 15455.36 points. The S&P and Nasdaq ended their six consecutive positive trends. This week, the Dow Jones Industrial Average rose 0.65%, the S&P 500 index rose 1.06%, and the Nasdaq rose 0.94%.
On the market, American Express rose 7.07%, United Health Group rose 1.97%, leading the Dow Jones higher. The performance of chip stocks was weak, leading the decline in the technology sector. Intel fell 11.91%, Gexin fell 4.77%, Microelectronics fell 3.05%, Qualcomm fell 2.43%, Chaowei Semiconductor fell 1.71%, and Nvidia fell 0.95%. Most Chinese concept stocks fell, with Gaotu Group falling 6.39% and Shengmei Semiconductor falling 6.27%.
On the news front, Intel previously announced its financial results for the fourth quarter and full year of 2023, with a revenue of $15.4 billion in the fourth quarter, a year-on-year increase of 10%; Net profit of 2.7 billion US dollars, with a net loss of 700 million US dollars for the same period in fiscal year 2022; The diluted net income per share (EPS) under non GAAP is $0.54. In the fiscal year 2023, Intel's annual revenue was $54.2 billion, a year-on-year decrease of 14%; Net profit of 1.7 billion US dollars, a year-on-year decrease of 79%; The gross profit margin is 40%, a year-on-year decrease of 2.6 percentage points.
Meanwhile, Intel has provided performance guidance for the first quarter of 2024. The company expects its revenue to reach $12.2 billion to $13.2 billion in the first quarter of 2024, far below market expectations of $14.25 billion; It is expected that the adjusted earnings per share for the first quarter under non GAAP accounting standards will be $0.13, lower than the market expectation of $0.34.
In the first quarter, Intel's revenue guidance was much lower than expected, and its data center business was impacted by AI, causing it to open down more than 10%. However, Intel CEO Pat Gelsinger stated that the market's response to the first quarter forecast has been exaggerated, and the wafer foundry business has "good momentum".
The Federal Reserve's favored inflation indicator is cooling down again
In terms of macro data, the indicators favored by the Federal Reserve show a cooling of inflation - the year-on-year growth of the US core PCE price index in December slowed down to 2.9%, hitting a new low since March 2021. Meanwhile, driven by strong salary growth, adjusted actual personal consumer expenditure (PCE) increased by 0.7% month on month for two consecutive months in December, marking the largest monthly increase in nearly a year.
Specifically, in December 2023, the core PCE price index in the United States increased by 2.9% year-on-year, with an expected 3.00%, compared to the previous value of 3.20%; A month on month increase of 0.2%, expected to be 0.20%, with a previous value of 0.10%. The PCE price index in the United States increased by 2.60% year-on-year in December 2023, with an expected increase of 2.60% compared to the previous value of 2.60%; The month on month increase was 0.2%, with an expected increase of 0.20%, and the previous value decreased by 0.10%.
Wall Street Journal journalist Nick Timiraos, known as the "New Federal Reserve News Agency," stated on social media that this is the sixth time in the past seven months that the core PCE price index has fallen below or remained at the Federal Reserve's target of 2% month on month. He also added that the 6-month annual rate of the core PCE price index is only 1.9%, and the 3-month annual rate is only 1.5%, both lower than the Federal Reserve's target value.
After the release of PCE data, the Fed watch tool of ChiNext showed that the likelihood of the Federal Reserve cutting interest rates in March is 47.4%, which is basically unchanged compared to the previous day. The price of US treasury bond bonds fell and the yield accelerated to rise. The benchmark 10-year US bond yield erased the intraday decline and was once close to the one month high set last Friday; The decline of the US dollar index has widened, breaking the daily low and continuing to fall off the six week high set on Tuesday, but maintaining the momentum of weekly gains since the beginning of 2024.
The market view is that the inflation situation is favorable, and there is room for the Federal Reserve to lower interest rates this year. However, Federal Reserve officials have been cautious about announcing the success of the anti inflation campaign, stating that they hope to see sustained signs of inflation cooling before taking action. Therefore, the Federal Reserve may be cautious at this stage. The current signs of a soft landing in the economy are increasing, and the market's expectation for the Federal Reserve is still when to cut interest rates, rather than whether it will.
Tok Group confirms that one of its oil tankers has been attacked
Soaring oil prices
In terms of the situation in the Red Sea, according to CCTV News citing British media reports on the 26th local time, a British oil tanker caught fire after being attacked by Houser militants while passing through the Red Sea.
The company to which the oil tanker belongs, Tok Group, stated that earlier on the 26th, the Marin Luanda, an oil tanker operated by the company, was hit by a missile while passing through the Red Sea. Previously, Yehya Sariya, a military spokesperson for the Yemeni Husai armed forces, issued a statement stating that their naval forces fired missiles at a British oil tanker, the Marin Luanda, in the Gulf of Aden and hit the target, causing the ship to catch fire.
Affected by this news, international oil prices rose rapidly during the trading session, smoothing out a nearly 2% decline and ultimately closing higher. On Friday, WTI March crude oil futures closed up 0.84% at $78.01 per barrel, a new high since November 29 last year, with a cumulative increase of 7.33% this week. Brent's March crude oil futures rose 1.36% to $83.55 per barrel, a new high since November 30th last year, with a cumulative increase of 6.35% this week.
According to data from the US Commodity Futures Trading Commission (CFTC), speculators increased their net long position in NYMEX WTI crude oil by 43980 contracts to 134140 contracts in the week of January 23, reaching a new high in the past 11 weeks. Since the beginning of this year, both WTI and Brent crude oil have risen by over 8%.
Regarding the recent fluctuations in the crude oil market, Sui Xiaoying, Chief Petrochemical Researcher at Fangzheng Mid term Futures Investment Consulting Department, believes that crude oil and related energy products have strong short-term support. On the one hand, due to the unexpected performance of US economic data and a significant reduction in US economic recession expectations, macroeconomic improvements have supported the oil market; On the other hand, OPEC+entered a voluntary production reduction phase in the first quarter, and crude oil supply from Russia and Iran both declined to a certain extent, continuing to support the fundamentals of crude oil supply and demand. In addition, the global geopolitical situation continues to be turbulent, and the Red Sea crisis has caused some oil tankers to detour, exacerbating local supply tensions and further boosting oil prices.
"As the situation develops, price fluctuations will continue to exist." Vandana Hari, founder of consulting firm Vanda Insights, believes that there is an unbalanced tug of war between the bearish outlook of the oil market fundamentals and the support of Middle East risk premiums. At present, both will continue to play a role.
Alaska Airlines:
The first batch of Boeing 737 MAX 9 aircraft has completed inspection
Will resume operations
According to CCTV News, on the 26th local time, Alaska Airlines issued a statement stating that the company has completed the final inspection of the first batch of Boeing 737 MAX 9 aircraft. The first 737 MAX 9 aircraft will fly from Seattle to San Diego on the afternoon of the 26th local time and resume operations. Alaska Airlines stated that the inspection of the 737 MAX 9 aircraft is expected to be completed by next weekend.
It is reported that each 737 MAX 9 aircraft will only resume operation after completing strict inspections and being deemed airworthy according to the requirements of the Federal Aviation Administration of the United States. The individual inspection of each aircraft takes approximately 12 hours.