Several Chinese concept stocks experienced a sharp decline.
On August 20th local time, the three major indexes of the US stock market closed slightly lower, and the Nasdaq and S&P 500 index ended their eight consecutive trading days of gains. Federal Reserve Governor Bowman remains concerned about inflation risks, but if price increases slow down, he will support interest rate cuts. The market continues to pay attention to US stock reports, Federal Reserve meeting minutes, and Powell's speech at the Jackson Hole Central Bank Annual Meeting.
Popular Chinese concept stocks generally fell, with the Nasdaq China Golden Dragon Index (HXC) closing down 3.95%. Among them, Vipshop fell 17.55%, and the company's net revenue guidance for the third quarter was lower than expected; IQiyi fell over 7%, Kingsoft Cloud fell over 6%, and Xiaopeng Motors, NIO, and Ideal Motors fell over 5%.
In addition, JD's US stock market fell more than 10% after the market closed.
The US stock market closed slightly lower, while the Nasdaq and S&P stopped rising for eight consecutive days
On August 20th local time, the three major US stock indices closed slightly lower. As of the close, the Dow Jones Industrial Average fell 61.56 points, or 0.15%, to 40834.97 points; The Nasdaq fell 59.83 points, or 0.33%, to 17816.94 points; The S&P 500 index fell 11.13 points, or 0.20%, to 5597.12 points.
The S&P 500 index and the Nasdaq both ended their eight consecutive days of gains, while the Dow Jones Industrial Average stopped its five day streak of gains. Since August, the US stock market has experienced significant fluctuations. On August 5th, the S&P 500 index experienced its worst trading day since 2022. Since then, with strong retail sales data and last week's inflation report helping investors ease concerns about an economic recession, the main average index has rebounded, and the CBOE Volatility Index (VIX), which measures market panic, has now dropped to 14.7 after breaking through 65 on August 5th.
This week, investors are focusing on the global central bank annual meeting held in Jackson Hole, and Federal Reserve Chairman Powell is scheduled to give a speech at this economic seminar on Friday. Wall Street is seeking hints about the expected September meeting of the Federal Reserve.
Federal Reserve policymakers have hinted in recent days that they may ease policy in September, laying the foundation for Powell and other policymakers to issue a similar tone at the annual global central bank governors' meeting in Jackson Hole, Wyoming.
Federal Reserve Governor Michelle Bowman said she still believes there is an upward risk of inflation, but if price increases continue to slow down, the central bank would be better off starting to gradually cut interest rates. Bowman gave a prepared speech to the Alaska Bankers Association on Tuesday, stating that if the upcoming data continues to show sustained inflation moving towards the Fed's 2% target, gradually lowering the federal funds rate to prevent monetary policy from becoming too tight would be appropriate. Bowman believes that there has been some further progress in reducing inflation in recent months, but upside risks still exist. Her statements on inflation and policies are consistent with those made earlier this month. Bowman stated that the labor market continues to relax and there are signs that the labor market is becoming more balanced.
Most economists expect the Federal Reserve to cut interest rates three times this year.
According to the Federal Reserve Watch tool from the Chicago Mercantile Exchange, the pricing of federal futures funds shows a probability of about 76% for Federal Reserve policy makers to cut interest rates by 25 basis points (a quarter of a percentage point) in September.
Most economists expect the Federal Reserve to cut interest rates by 25 basis points in each of its remaining three meetings in 2024. This forecast has increased compared to last month, reflecting a reassessment of the economic outlook.
Many economists believe that the Federal Reserve will not act quickly, and recent data, including strong retail sales reports, show that the US economy is performing well and inflation has eased. In addition, economists generally believe that the likelihood of the US economy falling into recession is low.
Economists generally believe that the US economy will continue to grow at a near trend rate at least until 2027. The median prediction of a smaller sample shows that the likelihood of an economic recession is only 30%, and this expectation has not changed much since the beginning of the year.
Popular Chinese concept stocks generally decline
In terms of sectors, the 11 major sectors of the S&P 500 index fell seven times and rose four times. The energy and materials sectors led the decline with a decrease of 2.65% and 0.38% respectively, while the essential consumer goods and medical sectors led the rise with an increase of 0.53% and 0.37% respectively.
Large tech stocks have seen more declines than gains. Intel, Nvidia, and AMD computers fell more than 2%, TSMC, Qualcomm, and Broadcom fell more than 1%, ASML, Tesla, and Meta fell slightly, Apple, Google A, Amazon, AMD Semiconductor, Microsoft, and Oracle rose slightly, and Netflix soared more than 1%.
Nvidia closed down 2.12%, with a transaction volume of 37.327 billion US dollars. Previously, the stock had risen for six consecutive trading days, and the stock price had surged more than 30% from its low point in early August. Currently, investors are most concerned about whether Nvidia can continue to rise in the future. Goldman Sachs believes that a huge potential catalyst for Nvidia's stock is about to emerge: the company will release its second quarter performance report next Wednesday (28th) Eastern Time. Goldman Sachs analyst Toshiya Hari is generally optimistic about this financial report, stating in his latest report that Nvidia will continue to maintain its strong position in the AI and accelerated computing fields, benefiting from strong demand from large cloud service providers and enterprise clients. Goldman Sachs continues to maintain a 'buy' rating on Nvidia, with a target price of $135.
Netflix rose 1.45%, with a transaction volume of 3.332 billion US dollars. Netflix announced on Tuesday that its early advertising revenue commitments for this year have surged by over 150% year-on-year, partly due to National Football League (NFL) games landing on the platform on Christmas Day. In the second year of early negotiations, where internet and media companies aimed to secure advertising commitments for upcoming programs, Netflix successfully reached advertising agreements with all major holding companies and independent organizations.
Boeing closed down 4.20%, with a transaction volume of 1.639 billion US dollars. Boeing announced on Monday (August 19) that during the first flight test of the wide body aircraft 777X, it was discovered that one of the planes had structural damage and subsequently grounded the test fleet. Boeing stated in a statement that the damaged component is located between the engine and the body structure, and that the faulty component will be replaced and the cause of the problem identified in the future. Flight testing will resume once everything is clear. The new wide body aircraft 777X, as Boeing's latest generation of twin aisle aircraft, is highly anticipated by the market for its high fuel efficiency and more spacious cabin design. Boeing currently has an order for 540 new 777X aircraft, scheduled for delivery in 2025. Prior to this, in July, Boeing finally began flight testing with the assistance of the US regulatory agency, the Federal Aviation Administration (FAA), marking an important milestone. However, the latest test flight malfunction event has once again cast a shadow over the prospects of this company. It is currently unclear whether the suspension of test flights and related issues will affect the certification and delivery of new wide body aircraft. Boeing has informed the FAA and its customers of the incident.
Most financial stocks have fallen. Bank of America fell more than 2%, while Mizuho Financial, Deutsche Bank, Goldman Sachs, Barclays, Citigroup, Jiaxin Wealth Management, and BlackRock fell more than 1%. First Capital Financial, Morgan Stanley, Travelers Insurance, American International Group, MetLife, Bank of New York Mellon, Wells Fargo, JPMorgan Chase, American Express, Hartford Financial, and Allstar Insurance fell slightly. UBS Group remained flat, while United Bank of America, Regional Financial, Mastercard, and Visa rose slightly.
Most energy stocks fell. Apache Oil and ExxonMobil fell more than 3%, Schlumberger, BP (US), Western Petroleum, Imperial Oil, Marathon Oil, and Shell fell more than 2%, Petrobras, ConocoPhillips, and Chevron fell more than 1%, Duke Energy fell slightly, and US Energy rose more than 1%.
ExxonMobil closed down 3.33%, closing at $1.801 billion. Oil analysts say that overseas oil giants' performance in the first half of 2024 is generally under pressure due to factors such as the decline in natural gas prices and refining profits. Among the five major oil giants, ExxonMobil's net profit attributable to shareholders decreased by 9.6% year-on-year.
Popular Chinese concept stocks generally fell, with the Nasdaq China Golden Dragon Index (HXC) closing down 3.95%. Vipshop fell over 17%, iQiyi fell over 7%, Kingsoft Cloud fell over 6%, Xiaopeng Motors, NIO, and Ideal Auto fell over 5%, JD.com, Pinduoduo, Futu Holdings, and New Oriental fell over 4%, Tiger Securities, Ctrip, Alibaba, and Huya fell over 3%, and NetEase, Bilibili, Baidu, and Tencent Music fell over 2%.
Vipshop closed down 17.55%. Vipshop's third quarter net revenue guidance was lower than expected.
Tencent Music closed down 2.44%. Tencent Music has lowered its target price by multiple institutions.
Network security company Paituo Network saw a significant increase of 7.18%, with its fourth quarter performance exceeding expectations and adjusted earnings guidance higher than expected.
In other markets, West Texas Intermediate (WTI) futures for September delivery on the New York Mercantile Exchange fell 33 cents, or 0.44%, to close at $74.04 per barrel.
