On Thursday, January 11th local time, the three major US stock indexes opened high and closed low, with intraday fluctuations and gains, and remained relatively stable in the end of the day. As of the close, the Dow Jones Industrial Average rose 0.04%, the Nasdaq closed flat, and the S&P 500 index fell slightly by 0.07%.
The US inflation report was the focus of attention for traders on Thursday. The data released on the same day showed that the year-on-year and month on month growth rates of the US CPI in December 2023 rebounded and exceeded expectations, with the core CPI rising by 3.9% year-on-year. It fell below 4% for the first time since May 2021, but the month on month growth rate of 0.3% did not cool down again. After the data was released, the market's likelihood of the Federal Reserve cutting interest rates in March and May has decreased.
Large tech stocks saw mixed gains and losses, with Nvidia hitting a new high in both intraday and closing history for the fourth consecutive trading day. The stock broke through the $550 mark on Thursday and rose as high as $553.46. The market continues to be optimistic about the company's software and hardware advantages in the field of artificial intelligence.
US CPI rebounds beyond expectations, reducing Federal Reserve's interest rate cut bet
On Thursday, January 11th, the US Bureau of Labor Statistics released data showing that the US CPI in December 2023 increased by 3.4% year-on-year, marking a new high since September 2023, with an estimated 3.2% and a previous value of 3.1%; The month on month increase is 0.3%, estimated to be 0.2%, and the previous value was 0.1%. The core CPI of the United States increased by 3.9% year-on-year in December 2023, marking a new low since May 2021, with an estimated 3.8% and a previous value of 4.0%; A month on month increase of 0.3%, expected to be 0.3%, compared to the previous value of 0.3%.
The cost of the service industry (mainly housing) accelerated again in December last year, with food inflation reaching a new high and the downward trend of energy inflation coming to a halt. From various sub items, housing, electricity, and motor vehicle insurance prices have increased, and second-hand car prices have unexpectedly risen for the second consecutive month, exceeding analysts' previous downward expectations.
Another data shows that as of January 6th, the number of initial claims for unemployment benefits decreased by 1000 to 202000, the lowest level since mid October last year, lower than market expectations of 209000 and the previous week's revised 203000.
Meanwhile, the US Department of Labor announced last week that the country added more jobs than economists had expected in December last year, while the unemployment rate remained near a historic low of 3.7%.
After the data was released, the market's likelihood of the Federal Reserve cutting interest rates in March and May has decreased.
Seema Shah, an analyst at Xinan Asset Management, said that the January 11 report highlighted a fact that market participants were "a bit too excited" about the timing of the Federal Reserve's interest rate cut. She said these numbers are not bad, but they do indicate that the progress of inflation's decline is still slow and it is unlikely to plummet to 2%. Of course, as long as housing inflation remains high, the Federal Reserve will continue to resist the idea of imminent interest rate cuts.
Phillip Neuhart, Head of Market and Economic Research at First Citizen Bank Wealth Management, said that inflation data shows that it will take time to bring inflation down to the Federal Reserve's target level. Due to the core inflation rate still approaching twice the Federal Reserve's target, we doubt whether the FOMC will cut interest rates at its meeting in March.
Since the beginning of this year, investors have been reconsidering the magnitude and timing of the Federal Reserve's interest rate cuts. Federal Reserve futures prices show that traders expect the Federal Reserve to cut interest rates by 140 basis points this year, and by the end of 2023, they expect to cut rates by 160 basis points.
The US stock market has basically closed flat, with Nvidia hitting a new high for four consecutive days
On January 11th local time, the three major US stock indexes opened high and closed low, with intraday fluctuations and gains, and remained relatively stable in the end of the day. As of the close, the Dow Jones Industrial Average rose 15.29 points, or 0.04%, to 37711.02 points; The Nasdaq rose 0.54 points to 14970.19 points; The S&P 500 index fell 3.21 points, or 0.07%, to 4780.24 points.
Large technology stocks saw mixed gains and losses, with Netflix rising nearly 3%, Amazon and Nvidia rising nearly 1%, and Microsoft, Dow, SAP, Cisco, Intel, and Nokia slightly rising; Tesla fell nearly 3%, eBay fell more than 1%, and Texas Instruments, Microelectronics, Apple, Meta, Qualcomm, and Google saw a slight decline.
Nvidia closed up 0.87% at $548.22 per share, breaking through the $550 mark during trading and rising as high as $553.46, hitting a new high in both intraday and closing history for the fourth consecutive trading day. The market continues to be optimistic about the company's software and hardware advantages in the field of artificial intelligence.
Microsoft rose 0.49%, surpassing Apple in market value at one point during trading to become the company with the highest stock market value in the United States. Subsequently, Microsoft's gains narrowed, and Apple regained its title as the most valuable company in the US stock market. Microsoft announced on Thursday that cloud computing clients from the European Union are able to store all personal data within the broader data boundaries of Europe. Microsoft pointed out that as the first step of its important plan to gradually phase out the EU Data Boundary in 2023, the company is now able to store and process customer data for Microsoft 365, Azure, Power Platform, and Dynamics 365 services within the EU Data Boundary.
Tesla closed down 2.87%. On the news front, Tesla announced on Thursday that the company will suspend most of its car production at its factories near Berlin from January 29th to February 11th, citing a change in transportation routes due to the Red Sea armed conflict, resulting in a shortage of parts. Tesla said in a statement, "The extended transportation time has caused a gap in the supply chain."
According to reports, Tesla's factory workers across the United States will receive salary increases. According to an internal document posted at Tesla's Fremont factory in California, all US production line employees, material handlers, and quality inspectors will receive a "market adjusted salary increase" as a New Year's benefit. The document did not mention a specific salary increase, and Tesla's Senior Director of Human Resources did not respond to this.
Cryptocurrency concept stocks plummeted on the first day of listing on Bitcoin spot ETFs, with Riot Platforms falling nearly 16%, Marathon Digital falling over 12%, Ebon International and Bitcoin Digital falling over 8%, Bitmining falling over 7%, and Coinbase falling over 6%.
Chinese concept stocks rose generally, with the Nasdaq China Golden Dragon Index up 1.05%. Century Internet rose by over 8%, Dingdong Maicai and Huya rose by over 7%, Douyu rose by over 5%, Tencent Music and TAL Music rose by over 4%, Tuniu rose by over 3%, Manbang, NetEase Youdao, Yixian E-commerce, New Oriental, Gaotu, Litchi, and Ideal Auto rose by over 2%, iQiyi, NetEase, Pinduoduo, Alibaba Baba, Baidu, and Bilibili rose by over 1%, while Ctrip, JD.com, and Vipshop rose slightly; Xiaopeng Motors fell more than 1%, while NIO, MINISO, and Zhongtong Express saw a slight decline.
