U.S. stocks closed: Powell's shock did not last, chip stocks rallied to support the rebound of U.S. stocks, and Nvidia was eight consecutive positives
The impact of Fed Chairman Jerome Powell's hawkish release does not seem to be long-lasting, and U.S. stocks rebounded sharply the day after Powell's hawkish speech, with the Nasdaq recording its best one-day performance in five months, and major stock indexes were able to continue to gain throughout the week. Chip stocks became the main upward driver, and after the news that three new chips will be released in China, Nvidia extended its rally since November, hitting the longest winning streak since late March.
Speeches from a number of Fed officials this week poured cold water on the market's expectations of a dovish rate cut next year, but major U.S. stock indexes continued to rise, and by Thursday Powell said that he was not confident that monetary policy was tight enough to raise interest rates without hesitation if necessary. After the recent multi-day rise in the U.S. stock index, Powell's statement became the last straw that catalyzed the retracement of U.S. stocks.
The preliminary long-term inflation expectations of U.S. consumers in November did not stabilize as expected, but rose to a new high since 2011, according to a survey by the University of Michigan released in early U.S. trading on Friday.
After the announcement of consumer inflation expectations, U.S. bond prices fell, yields staged a V-shaped rebound, erasing the intraday decline and turned up, the interest rate-sensitive two-year U.S. Treasury yield fell below 5.0% intraday, and stood above 5.0% after the release of the data, refreshing the high since the beginning of this month, and the yield rebounded sharply throughout the week, partly reflecting the impact of Powell's speech; The U.S. dollar index rallied intraday, hitting 106 for the first time in a week, and although it has since turned lower, it has rebounded throughout the week after a sharp retreat last week.
Friday's speeches by European and American central bank officials did not blindly send hawkish signals: ECB President Christine Lagarde said that inflation in the eurozone may rebound after falling to a two-year low recently, but if the ECB keeps interest rates at current levels for at least several quarters, it may still reach the inflation target, and if necessary, central bank officials will consider raising interest rates again; Bank of France Governor Degallo said there would be no further rate hikes unless there was a new shock, but it was too early to discuss a rate cut; Atlanta Fed President Bostic said Fed policymakers could bring inflation back to target without further rate hikes.
Despite the temporary return to gains, U.S. stocks still face challenges. There are comments that if U.S. stocks want to continue to rise after that, they need to calm the bond market, and the sharp drop in U.S. Treasury yields has no more benefits for the stock market than a jump in yields. Moreover, a University of Michigan survey on Friday showed that rising inflation expectations, combined with concerns about the durability of consumer spending, are making it difficult for Fed policymakers who are debating whether to raise interest rates further.
However, there are also comments that job openings are still high, the view that the private sector balance sheet is still supporting a soft landing for the economy, and even if there is uncertainty about the Fed ending its rate hikes, the economy is more resilient than previously expected, helping US stocks to move higher during the year-end period. In addition, EPFR Global data showed that global equities saw $8.8 billion in inflows in the week to Wednesday, which Bank of America believes reflects the market's optimism as the cautious sentiment that has permeated U.S. equities over the past three months has shifted to "year-end greed" in anticipation of a pullback in Treasury yields.
In the currency market, the yen weakened further under the pressure of the dollar's intraday rally, briefly testing 151.60, approaching a one-year low set on Tuesday, and the offshore yuan fell to 7.30 intraday for two consecutive days. Boosted by optimism that a Bitcoin spot ETF is expected to be approved, Bitcoin, which rose to a new high of one and a half years on Thursday, stabilized above $37,000, while Ethereum, another major cryptocurrency, rose above $2,100 intraday to continue to hit a seven-month high and a double-digit rise in a week.
Among commodities, risk assets rose, risk aversion ebbed, and Powell's speech hit the expectation that U.S. interest rates would peak, gold fell sharply on Friday, and New York gold futures recorded the largest daily decline since mid-April, failing to continue the one-week cumulative momentum that lasted for a month since the outbreak of the Palestinian-Israeli conflict; Palladium continued to hit its lowest level since 2018, closing below the $1,000 mark for the first time in five years.
International crude oil continued to rebound, further off the low since July, but the momentum of three consecutive weeks of decline has not changed. The focus of the oil market has shifted from geopolitical risks to the supply and demand side, with oil prices reflecting a focus on China's import and export data this week, and the American Petroleum Institute (API) reporting that U.S. crude inventories surged by nearly 12 million barrels last week, adding to concerns on the demand side. There are commentators that the recent pullback in oil prices is mainly due to the threat of oversupply, and the problem is not a lack of demand, but an oversupply.
The Nasdaq rose more than 2%, the three major stock indexes rose for two consecutive weeks, the chip stock index rose 4%, and Nvidia recorded the longest consecutive day of gains in more than seven months
The three major U.S. stock indexes that opened higher in the morning had fallen back in early trading, and the gains collectively expanded at the end of the morning, and they all rose further at midday, with the Nasdaq Composite Index expanding its gains to more than 2%, the S&P 500 Index rising more than 1%, and the Dow Jones Industrial Average Index rising nearly 420 points, also rising more than 1%. In the end, the three major indexes collectively closed higher on the third day of the week, with the Nasdaq and the S&P rebounding after ending a nine-day and eight-day winning streak on Thursday, respectively, and the Dow Jones retreating after two days.
The Nasdaq closed up 2.05%, rising more than 2% in one day for the first time since May 26 to 13,798.11 points, a new high since September 14. The S&P closed up 1.56% at 4,415.24, its highest since Sept. 19. The Dow closed up 391.16 points, or 1.15%, at 34,283.10, the highest since September 20.
The S&P regained 4,400 points, erasing losses since the Federal Reserve's monetary policy meeting in September
The technology-heavy Nasdaq 100 index. It closed up 2.25%, rebounding to its highest level since August 1, and both the Nasdaq posted their biggest gains since May 26. The Russell 2000, a small-cap index dominated by value stocks, closed up 1.07%, bidding farewell to its lows since Nov. 1, which fell for four consecutive days.
With Friday's big rally, all three major indexes rose for the second consecutive week this week, but not as much as last week. The Nasdaq, which rose 6.61% last week, rose 2.37%, the S&P, which rose 5.85%, rose 1.31%, and the Dow, which rose 5.07% last week, rose 0.65%, the biggest weekly gain since October 28 last year. The Nasdaq 100, which rose 6.48% last week, rose 2.85% and also rose for two consecutive weeks, while the Russell 2000, which rose 7.56% last week, fell 3.15% and fell back after reversing a four-week losing streak last week.
The three major U.S. stock indexes and the Nasdaq 100 all rose this week due to Friday's big rally, but the small-cap index Russell 2000 retreated
The major sectors of the S&P 500 collectively rebounded on Friday, led by chip stocks and Microsoft's IT, which closed up about 2.6%, Meta and Google's communication services, Tesla and Amazon's consumer staples all rose nearly 1.7%, and real estate, materials, industrials, financials, and energy also rose more than 1%.
A total of six sectors rose this week, with IT up nearly 4.8%, far outperforming other sectors, communication services up more than 2%, consumer discretionary up 0.9%, industrials up nearly 0.9%, and financials and consumer staples up less than 0.3%. Among the five declining sectors, energy fell 3.8% to lead the decline, reflecting the impact of crude oil decline, real estate and utilities fell more than 2%, materials fell 1.8%, and medical fell nearly 1%.
S&P ETFs across sectors have moved this week
Chip stocks rebounded sharply after a general pullback on Thursday, with the Philadelphia Semiconductor Index and the semiconductor industry ETF SOXX closing up about 4%, updating their highs since September 14, rising nearly 4% for the week and 4.1% for the month, respectively. By the close, Nvidia rose nearly 3%, up for eight consecutive days, the longest consecutive day since March 23, Broadcom rose more than 5%, AMD rose more than 4%, Qualcomm rose more than 3%, Intel, Micron Technology rose more than 2%, first-quarter revenue and EPS earnings were higher than expected human machine interface hardware and software developer Synaptics (SYNA) rose about 10.8%, while Arm, which fell more than 5% on Thursday after announcing its earnings report, closed up more than 1%.
Leading tech stocks, which retreated on Thursday, rebounded across the board. Tesla closed up 2.2%, which will break away from the closing low since November 1, which fell for two consecutive days, and fell 2.4% this week after rising more than 6% last week, becoming a rare blue-chip technology stock that has fallen this week.
Tesla was the worst performer of the seven tech stocks this week, while Microsoft hit a record high and its market capitalization began to move closer to Apple
Most of FAANMG's six major technology stocks rose more than 2%, among them, Microsoft closed up nearly 2.5%, hitting an intraday all-time high for the first time since July, and a record closing record high on the third day of the week after Tuesday and Wednesday; Facebook's parent company Meta closed up nearly 2.6%, rising for six consecutive days, hitting a new high since January last year; Apple closed up 2.3%, rebounding to its highest level since Sept. 5; Netflix closed up nearly 2.8%, rebounding to its highest level since Sept. 5; Amazon closed up 2.1%, rebounding to its highest level since Sept. 14; Google's parent company, Alphabet, closed up 1.8%.
These tech stocks have all risen this week, with Apple up 5.5%, Microsoft up about 4.8%, Meta up 4.5%, Amazon and Netflix up more than 3%, and Alphabet up 2.7%.
The seven major tech stocks, including Apple, Microsoft, Alphabet, Meta, Amazon, Tesla and Nvidia, have collectively risen on 11 of the past 11 trading days, during which time their combined market capitalization has surged by $1.3 trillion and by Friday, they are generally at their highest level since July.
The seven major technology stocks are generally at their highest levels since July, with a combined market capitalization of $1.3 trillion surging in the last 11 trading days
AI concept stocks rebounded after falling for two consecutive days. By the close, Palantir (PLTR) rose more than 7%, Soundhound .ai (SOUN) and Adobe (ADBE) rose more than 3%, C3 .ai (AI) rose more than 2%, and BigBear .ai (BBAI) rose more than 1%.
Some of the popular Chinese concept stocks followed the rebound of the broader market. The Nasdaq Golden Dragon China Index (HXC) turned higher at midday, closing up nearly 0.5%, reversing a four-day losing streak and bidding farewell to its low since November 1, falling about 2.8% this week. Chinese ETFs KWEB and CQQQ closed up nearly 0.2% and 2.3%, respectively. As of the close, Daqo New Energy rose more than 2%, NetEase rose 0.8%, Baidu rose more than 0.7%, Pinduoduo rose nearly 0.7%, Alibaba and JD.com rose slightly, while Xiaopeng Motors fell more than 4%, Weilai fell more than 3%, Li Auto fell more than 2%, Station B fell nearly 0.3%, and Tencent Fan Sheet fell nearly 0.2%.
Among the stocks that reported earnings, Groupon (QRPN), the originator of the group buy, which reported lower-than-expected revenue and global orders in the third quarter and approved the issuance of $80 million of shares to common shareholders, fell 40% intraday; Plug Power (PLUG), a clean energy company that reported lower-than-expected third-quarter results, fell more than 40% intraday after RBC and JPMorgan Chase downgraded it; Treace Medical Concepts (TMCI), a medical device company with lower-than-expected revenue and higher-than-expected losses in the third quarter, and lowered its full-year revenue guidance, fell more than 40% intraday; Clean energy battery developer Freyr Battery (FREY), which was downgraded to neutral by BTIG after a higher-than-expected loss in the third quarter, fell more than 20% intraday; Illumina (ILMN), a biotechnology stock with lower-than-expected revenue in the third quarter and a lower-than-expected EPS earnings guidance, fell more than 10% intraday; The Trade Desk (TTD), a digital marketing company with weak fourth-quarter revenue guidance due to cautious advertisers in industries such as automobiles, fell more than 10% intraday; Although total revenue and profit in the third quarter were higher than expected, investors focused on EBDITAR earnings related to the Macau business, including restructuring, and gaming and entertainment stock Wynn Resorts (WYNN) fell more than 7% intraday; And medical technology company Hologic (HOLX), whose revenue and earnings in the third quarter were also higher than expected, rose more than 6% intraday.
European stocks, which escaped the catastrophe after Powell's speech after the close of trading on Thursday, were not spared on Friday, and the poor performance of some companies caused the pan-European stock index to halt a two-day winning streak. The Euro Stoxx 600 index closed down 1%, not only falling to a three-week closing high set on Thursday, but also giving up gains accumulated in previous days. Stock indexes of major European countries retreated.
Among the sectors, food and beverage closed down nearly 3.1%, weighed down by a 12.2% plunge in London-listed liquor giant Diageo, which is expected to see organic operating profit growth decline in the first half of the current fiscal year, and British stocks led the decline in European stock indexes, as earnings were lower than expected Swiss Richemont fell 5.2%, personal and household goods fell 2.6%, and other luxury giants also fell, LVMH fell 3.8%, Kering fell 3.3%, and Hermès fell 1.6%.
The STOXX 600 index fell slightly this week, retreating after rising 3.4% last week, its biggest weekly gain since March 31, and failed to rise for two consecutive weeks. Stock indexes across the country performed mixed, with German and Western stocks rising for two consecutive weeks, and British, French and Italian stocks that rebounded last week retreating.
Among the sectors, the basic resources of the sector where mining stocks are located fell by more than 3%, and the real estate of the interest rate-sensitive sector, which rose by more than 12% last week, fell by 2.5%, the largest decline, highlighting the impact of the rebound after the sharp decline in European bond yields; The industrial rose nearly 1.6%, the best performance, the media also rose more than 1%, and although oil and gas closed up 0.3% against the market on Friday, it fell more than 1% for the week, falling for four consecutive weeks.
The two-year Treasury yield fell below 5.0% intraday before rising to a one-week high, rebounding more than 20 basis points this week
European government bond prices rebounded and yields recovered. By the end of the bond market, the UK 10-year benchmark government bond yield closed at 4.33%, up 6 basis points on the day; The yield on the benchmark 10-year German bunds closed at 2.71%, up 7 basis points on the day.
This week, European Treasury yields rebounded after two consecutive weeks of declines, including European Central Bank Vice President De Guindos, who said it was too early to discuss a rate cut, and a number of European and British central bank officials spoke this week that hit rate cut expectations. The yield on 10-year UK Treasury bonds has risen by about 5 basis points, falling by about 26 basis points last week when the Bank of England announced that it would continue to pause interest rate hikes; The yield on the 10-year German bond, which fell about 19 basis points last week, has risen by about 7 basis points, climbing for the seventh week in the last 10 weeks.
U.S. Treasury yields, which rose more than 10 basis points intraday on Thursday, rebounded in a V-shaped intraday rebound, refreshing daily lows before the announcement of U.S. consumer expectations, and continued to rise after the announcement, with yields climbing this week, ending a two-week losing streak.
The U.S. 10-year benchmark Treasury bond yield was close to 4.66% in early Asian trading to refresh the daily high, the U.S. stock market accelerated its decline before the market, and at the beginning of the session it fell below 4.57% to refresh the daily low, falling nearly 6 basis points in the day, and the previous low since the end of September was still far from the low level of the United States consumer inflation expectations, the decline continued to narrow after the announcement of U.S. consumer inflation expectations, and the U.S. stock market regained 4.60% at the end of the morning session, and was about 4.65% at the end of the bond market, rising about 3 basis points in the day, rising for two consecutive days, and rising about 8 basis points this week.
U.S. Treasury yields of all maturities generally recovered on Thursday and Friday, with short-term yields leading the week increase
The 2-year U.S. Treasury yield, which is more sensitive to the outlook for interest rates, rose above 5.04% in early Asian trading, and the decline in U.S. stocks expanded and fell below 5.0% in pre-market trading, and the U.S. stock market fell below 4.98% at the beginning of the day to refresh the daily low, down nearly 5 basis points in the day, still far from the intraday low since September 1, which was refreshed by 4.80% last Friday, and the U.S. stock market regained 5.0% in early trading after the announcement of consumer inflation expectations, and rose above 5.06% at midday, refreshing the high since November 1, and about 5.06% at the end of the bond market. It rose about 4 basis points in the day, rising for three consecutive days, and rising about 22 basis points this week.
The 2-year Treasury yield regained 5.0% on Friday, its biggest weekly gain since May
The U.S. dollar index rose to a one-week high intraday, and Ethereum hit a seven-month high in a row, rising more than 10% in a week
The ICE U.S. Dollar Index (DXY), which tracks a basket of six major currencies such as the U.S. dollar against the euro, fell below 105.80 to refresh the daily low before the U.S. stock market, down nearly 0.2% during the day, and the U.S. consumer inflation expectations quickly turned higher after the announcement, and the U.S. stock market rushed to 106.00 in early trading, hitting 106.00 for the first time in a week, refreshing the high since last Friday, rising nearly 0.1% during the day, and turning lower at midday.
By the close of U.S. stocks on Friday, the U.S. dollar index was slightly below 105.80, down about 0.1% during the day, and up about 0.8% for the week; The Bloomberg Dollar Spot Index, which tracks the greenback against 10 other currencies, fell as much as 0.2% and rose nearly 0.8% for the week, and the dollar index both halted a four-day winning streak and rebounded this week after falling sharply last week to post its biggest weekly decline since July.
Among non-U.S. currencies, the yen continued to fall, with USD/JPY approaching 151.60 at midday, approaching the highest since October last year after rising above 151.70 last Tuesday. The offshore yuan (CNH) against the U.S. dollar basically maintained a downward trend on Friday, with less volatility than Thursday, and the Asian market refreshed its daily high of 7.2970 in the early morning of the Asian market, after which, it fell to 7.30 for the second consecutive day, and the U.S. stock market refreshed the daily low of 7.3076 in early trading, down 97 points in the day, and continued to fall from the intraday high since September 15, when the Asian market rose above 7.27 on Wednesday.
At 5:59 on November 11, Beijing time, the offshore yuan was quoted at 7.3065 yuan against the US dollar, down 86 points from the end of New York on Thursday, falling for three consecutive days, falling 177 points this week, and falling back after the end of last week's four-week losing streak.
Bitcoin (BTC) rose above $37,400 in the U.S. stock market on Friday to refresh the daily high, up more than $1,000 or more than 3% from the daily low of European stocks in early trading, and the U.S. stock market closed above $37,300, up more than 2% in the last 24 hours, although it was not close to the high since May last year set by approaching $38,000 on Thursday, but it has risen more than 7% in the last seven days.
Bitcoin rose above $37,000 this week before hitting a one-and-a-half-year high, returning to where it was before the Terra stablecoin crisis
Ethereum (ETH) rose above $2,130 in the Asian market, hitting a new high since April for two consecutive days, U.S. stocks fell $2,100 premarket, regained $2,100 at midday, and U.S. stocks closed close to $2,100, up nearly 2% in the last 24 hours, and nearly 15% in the last seven days.
Ethereum had its best weekly performance since April this week
Crude oil rebounded for three consecutive weeks and fell more than 4% in a week
International crude oil futures continued to rebound on Friday, closing up for two consecutive days after falling for three consecutive days.
U.S. WTI crude oil futures for December delivery closed up 1.89% at $77.17 a barrel; Brent crude futures for January delivery closed up 1.77% at $81.43 a barrel, as both U.S. oil continued to bid farewell to Wednesday's lows since July 19 and July 17, respectively.
This week, U.S. oil fell by 4.15%, and Brent oil fell by 4.08%, falling for three consecutive weeks, and it was also a consecutive weekly decline after rising for two weeks since the outbreak of the Palestinian-Israeli conflict. This week's cumulative decline was mainly due to the fact that China closed down more than 4% on Tuesday when it released its October import and export data, the biggest daily decline since October 4, and fell more than 2% on Wednesday after the US API crude oil inventory soared last week.
U.S. crude oil futures rebounded in the last two days of the week before rebounding to their 200-day moving averages
U.S. gasoline and natural gas futures continued to be mixed. NYMEX December gasoline futures closed up about 1.3% at $2.19 a gallon, continuing to break away from Wednesday's low level since December 12 last year, falling 0.5% this week, falling for three consecutive weeks; NYMEX December natural gas futures closed down 0.26% at $3.0330/MMBtu, the lowest level since October 25 for four consecutive days, falling for five consecutive days, and falling 13.7% this week after two consecutive weeks of gains, reflecting the impact of high temperatures hitting heating demand.
London nickel fell more than 5% in a week, gold hit the biggest daily decline in nearly four months, the Palestinian-Israeli conflict fell for the first time in a week, and palladium continued to hit a five-year low
London base metal futures fell across the board on Friday, with London nickel falling more than 3% and continuing to lead the decline, hitting a new low since June 2021 for two consecutive days, and London zinc and London tin fell for two consecutive days, and London zinc continued to fall from the high level since the end of September. London aluminum fell for four consecutive days to a two-week low. London lead, which closed flat on Thursday, fell to its highest level since late September on Wednesday, and London copper fell more than 1%, erasing Thursday's rebound gains and closing below $8,100 for the first time this month, falling back to a two-week low.
This week, base metals rose and fell, London nickel fell more than 5% to lead the decline, falling for three consecutive weeks, London copper rose for two weeks and London aluminum rose for three weeks, both fell 1.7%. The London zinc rose 1.5%, and the London lead rose nearly 0.4%, both rising for four consecutive weeks, and the London tin, which fell for two consecutive weeks, rose 1%.
New York gold futures continued to retreat on Friday, with COMEX December gold futures closing down 1.63%, the biggest daily drop since April 14, at $1,937.7 an ounce, refreshing Tuesday's lowest since Oct. 17.
In the week, which only closed up on Thursday, gold futures fell nearly 3.1%, ending a four-week winning streak and the first single-week decline since the outbreak of the Palestinian-Israeli conflict in five weeks.
Palladium fell for five consecutive days, and NYMEX December palladium futures closed down 3% at $978.8 an ounce, closing below $1,000 for the first time since 2018, and this week continued to hit a new low since 2008, down 13.3% for the week.
Spot gold had the third worst weekly performance this week