After a week of sharp decline in expectations of a Fed rate cut, US stocks rebounded across the board on Monday local time. Chip stocks led by Nvidia led the Nasdaq up over 8%, while Nvidia surged 6%, setting a new historical high for its stock price.
Contrary to the performance of chip stocks, heavyweight shipping and oil and gas stocks fell across the board, with Boeing plummeting by 8%. After the accident of an Alaska Airlines passenger plane in the United States, Boeing suffered a heavy setback after 171 737 MAX 9 planes were grounded, dragging the Dow Jones Industrial Average down more than 200 points during trading.
According to CCTV News, according to Agence France Presse on January 8th local time, United Airlines announced in a statement that loose bolts were found on a Boeing 737 MAX 9 aircraft previously grounded by the Federal Aviation Administration.
United Airlines stated in a statement, "Since the initial inspection began, we have discovered some situations that seem to be related to door plug installation issues, such as bolts that require additional tightening." The company stated that it will not disclose the specific number of loose bolts or other information, but will ensure that engineering personnel ensure the safe resumption of all Boeing 737 MAX aircraft after maintenance is completed.
In addition, the tense situation in the Red Sea is still disrupting the global shipping landscape. On Monday, there were market rumors that some shipping companies have now reached an agreement with the Hussai militants to allow them to pass through this important water area without obstruction, and shipping companies must ensure that they do not carry Israeli goods and do not stop at Israeli ports. This rumor led to a significant drop in shipping stocks on Monday local time, with Maersk experiencing an intraday drop of up to 8%. However, multiple shipping companies subsequently denied this rumor, and the decline in shipping stocks narrowed.
NVIDIA sets a new historical high
Drive the Nasdaq up by over 2%
On Monday local time, all three major US stock indices closed higher. As of the close, the Dow Jones Industrial Average rose 0.58% to 37683.01 points, the S&P 500 Index rose 1.41% to 4763.54 points, and the Nasdaq rose 2.2% to 14843.77 points.
Popular technology stocks rose generally, with semiconductors and software applications leading the way. AMD rose more than 5%, while nano and micro semiconductors, Intel, and NXP rose more than 3%. Apple, Google, Amazon, and Broadcom rose more than 2%.
Among them, chip leader Nvidia surged 6.43%, with its stock price reaching a historic high of $520 and a total market value of $1.29 trillion.
On the news side, according to foreign media reports, Nvidia plans to start mass production of artificial intelligence chips specifically designed for the Chinese market in the second quarter of 2024. The media quoted insiders as saying that the initial production of H20 AI chips specifically targeting the Chinese market will be very limited, and the company will mainly consider meeting orders from large customers.
Nvidia stated in its performance forecast that its total revenue for the fourth quarter of the 2024 fiscal year (for the fourth quarter ending in January this year) will reach approximately $20 billion. Although this data exceeds the average forecast of Wall Street analysts of $17.9 billion, some analysts even predict it to be as high as $21 billion.
In 2023, with investors investing heavily in this chip manufacturer, the demand for artificial intelligence has made Nvidia a focus of attention. Investors are betting that Nvidia's chips will provide power for the latest and most powerful large-scale language models, causing Nvidia's stock price to rise nearly 240% throughout the year.
Boeing's stock price plummeted by 8%
In terms of decline, on Monday's US stock market, oil and gas stocks and aviation stocks fell, while Total, Imperial Oil, and Senko Energy fell more than 2%, and Boeing fell more than 8%, marking the largest single day decline since October 2022. The stock price of Spirit AeroSystems, a supplier of Boeing, also fell 11.13% to $28.2 per share, a company that manufactures and installs door closures.
On the evening of January 5th local time, shortly after taking off from Portland, Oregon, USA, an Alaska Airlines Boeing 737 MAX 9 aircraft suddenly fell off the emergency hatch on the left side, center, and rear of the aircraft when it reached an altitude of 16000 feet (4878.6 meters), causing an instantaneous loss of pressure in the cabin and an emergency landing of the aircraft.
After the accident, the Federal Aviation Administration (FAA) of the United States ordered a temporary suspension of Boeing 737 MAX 9 aircraft operated by American airlines or within the United States, involving approximately 171 aircraft. Operators must inspect these aircraft in accordance with the instructions before resuming flights.
Several airlines around the world have also announced grounding measures for the aircraft models involved. Boeing stated that it has been informed of the accident and is collecting more information to cooperate with the investigation. Boeing's largest supplier, Spirit AeroSystems, will also face scrutiny.
In addition to aviation stocks, popular Chinese concept stocks also experienced a general decline on Monday local time, with the Nasdaq China Golden Dragon Index falling 1.47%. IQiyi and Xiaopeng Motors fell by about 3%, JD.com fell by over 2%, Ideal Automobile, Baidu, and Alibaba fell slightly, and Pinduoduo rose slightly. It is worth noting that Dada Group opened low all day and fell sharply by 45.87%.
On January 8th, Beijing time, JD.com announced that its consolidated subsidiary, Dada Group, had discovered some questionable behavior during its regular internal audit process, which may raise questions about Dada's online marketing service revenue and operating support costs for the first three quarters of 2023. The audit committee under Dada's board of directors has decided to conduct an independent review, which will be assisted by independent professional consultants. JD.com stated that the company has always and will continue to be committed to maintaining high standards of corporate governance and internal control, as well as transparent and timely information disclosure that complies with relevant rules and regulations.
Reached an agreement with the Husai armed forces? Maersk denies
The tense situation in the Red Sea is still disrupting global shipping.
According to the Danish shipping media ShippingWatch, a group of shipping companies sailing in the Red Sea have now reached an agreement with the Hussery armed forces to allow them to pass through this important water area without obstruction. Sources have confirmed that both sides have indeed held a meeting to ensure that specific ships pass through the Red Sea unscathed. It is reported that the requirement of the Hussai armed forces is that shipping companies must ensure that they do not carry Israeli goods and do not call at Israeli ports.
The report of reaching an agreement led to a significant drop in shipping stocks on Monday local time, with Maersk's stock price dropping as much as 8% at one point; However, multiple shipping companies subsequently denied this agreement, and the decline in shipping stocks narrowed. As of the close, Maersk stocks listed on the London stock market have narrowed their decline to 4%, while Maersk stocks listed in Copenhagen, Denmark have closed down 5%.
Swiss logistics service company Dexun stated that the world's large container shipping companies still largely avoid the Red Sea route. The company's spokesperson Franziska Bietke stated in an email that the latest information the company has received is that six out of the eight largest shipping companies have completely avoided the Red Sea, while the other two only dispatch ships based on specific circumstances.
In recent weeks, shipping stocks have been boosted by expectations that the attack by the Houser militants will lead to an increase in shipping rates. In addition to the quantity of goods, the distance traveled is also another key indicator of ship demand, as hundreds of ships diverted around Africa, resulting in a significant increase in shipping costs.
At present, the market is speculating whether shipping companies are willing to sign a reciprocal agreement with the Husai armed forces in exchange for shipping freedom. Vespucci Maritime analyst Lars Jensen stated that these agreements may have significant consequences.
