On July 6, local time, the three major U.S. stock indexes collectively closed higher, with the Dow Jones Industrial Average rising 0.23%, the S&P 500 Index rising 0.36%, and the Nasdaq Composite Index rising 0.35%.

Follow the blue words and don’t get lost~

Since July, the Nasdaq and S&P 500 index have achieved three consecutive gains.

On July 6, local time, the three major U.S. stock indexes collectively closed up, with the Dow Jones Industrial Average rising 0.23%, the S&P 500 Index rising 0.36%, and the Nasdaq Composite Index rising 0.35%.

Popular Chinese concept stocks were among the top losers. Nasdaq China Golden Dragon Index fell 4.64%, Pinduoduo fell 7.4%, Jingdong , Xpeng Motors fell more than 4%. International oil prices continued to fall, technically falling into a bear market, and the energy sector weakened.

The minutes of the June monetary policy meeting released by the Federal Reserve show that members believe that it may be appropriate to raise interest rates by 450 or 75 basis points at the July meeting. If inflation fails to decline, the Fed may even adopt more restrictive policies.

The Federal Reserve released the minutes of its interest rate meeting

Monetary policy may tighten again

On the afternoon of July 6, local time, the Federal Reserve released the minutes of the Federal Open Market Committee (FOMC) monetary policy meeting last month.

meeting minutes showed that most Fed officials believed that growth risks were biased to the downside. Members were "highly concerned" about inflation risks, with many participants concerned that long-term price expectations could rise. Affected by the situation in Russia and Ukraine, epidemic prevention and control and other factors, it may take some time to reduce the inflation rate to the 2% target. Members acknowledged that tightening monetary policy could lead to slower economic growth, but seeing inflation come back was critical to achieving sustainable maximum employment.

In discussing future monetary policy measures, participants continued to believe that it would be appropriate to achieve the Committee's employment and inflation objectives through uninterrupted interest rate increases. They judge that a 50 or 75 basis point interest rate hike at the July meeting may be appropriate. Economic expectations allow the Federal Reserve to adopt restrictive monetary policy. The Fed may even adopt more restrictive policies if inflation remains elevated.

In response to soaring inflation and financial market turmoil, the Federal Reserve raised benchmark interest rates by 75 basis points in June, the largest rate increase since 1994. After the meeting, Fed Chairman Powell said that he would resolutely curb inflation and may raise interest rates by 50 or 75 basis points at the July meeting, but 75 basis points of interest rate hikes will not become the norm. Recently, many Federal Reserve officials have made similar "hawkish" remarks.

Inflation analyst Omair Sharif believes that Fed officials were "scared" by May's 8.6% inflation data. "If you read the minutes of the meeting, you will clearly find that the Fed has updated its understanding of the inflation problem and needs to quickly change its neutral attitude from the past to a restrictive one." Sharif wrote.

Wells Fargo strategist Zachary Griffiths (Zachary Griffiths) said that the market is paying attention to how strong the Fed's restrictive measures are, which may be more "hawkish" than Powell's statement at the press conference. "The minutes may indicate that Fed officials will tolerate a mild recession. If the inflation data is too high, they will tighten policy further. Although the attitude is hawkish, they are trying to make a sound that they are committed to reducing inflation." Griffiths said .

Data released by the Mortgage Bankers Association (MBA) showed that mortgage rates fell 24 basis points in the first two weeks. The average interest rate on a 30-year fixed-rate mortgage with a conforming loan balance was 5.74%, down 10 basis points from the previous week. However, while interest rates fell, mortgage application volumes continued to fall last week, with total mortgage demand down 5.4% from the previous week.

International Monetary Fund (IMF) President Georgieva said that the global economic outlook has "diminished significantly" since April and that given the heightened risks, the possibility of a global recession next year cannot be ruled out. . The International Monetary Fund will lower its forecast for global economic growth of 3.6% in 2022 in the coming weeks, with economists at the organization still finalizing new expectations.

U.S. stocks closed up in shock

International oil prices fell into the bear market

On the day, the three major U.S. stock indexes opened slightly higher and showed a volatile trend during the session.After the release of the minutes of the Federal Reserve meeting, the major indexes rose. The Nasdaq and S&P 500 once rose by more than 1%, but dived in late trading, and the gains eventually narrowed.

As of the close, the Dow rose 69.86 points, or 0.23%, to 31037.68 points; the Nasdaq rose 39.61 points, or 0.35%, to 11361.85 points; the S&P 500 index rose 13.69 points, or 0.36%, to 3845.08 points. Together with Nasdaq , it achieved "three consecutive gains" on the daily line.

Looking at the market, most of the large technology stocks rose, Microsoft , Google , and NVIDIA rose by more than 1%, Apple , Facebook parent company Meta rose by more than 0.9%, Amazon rose by 0.73%, Tesla fell 0.57%. Despite the slight decline, Tesla's stock price still outperformed most of its auto industry peers. According to preliminary estimates from the Passenger Car Association, Tesla's car sales in China in June reached 78,000, a month-on-month increase of 142% and a year-on-year increase of 135%.

Popular Chinese concept stocks were among the top losers, with the Nasdaq China Golden Dragon Index falling 4.64%. shell fell by more than 10%, Pinduoduo fell by 7.4%, Weilai , BeiGene fell by more than 6%, JD.com and Xiaopeng Motors fell by more than 4%, NetEase, Baidu , Li Auto, China Tong Express fell more than 3%, Alibaba fell 0.84%.

International oil prices continued to fall, and the energy sector weakened. Among them, Total fell by more than 4%, and Exxon Mobil, Chevron , Shell, and Norway Oil all fell by more than 1%.

data shows that the price of light crude oil futures for August delivery on the New York Mercantile Exchange closed at US$98.53 per barrel, a decrease of 0.97%; the price of London Brent crude oil futures for September delivery closed at US$100.69 per barrel. , a decrease of 2.02%. Compared with the closing price high on March 8 this year, the price of the first line contract of New York crude oil futures fell by 20.35% cumulatively, and the cumulative decrease of the first line contract of Brent crude oil futures was 21.32%. Both technically fell into a bear market.

Everbright Securities report pointed out that when the inflation level is higher than 4%, the probability of a soft landing for the U.S. economy is extremely low; if inflation is within a controllable range, the economy still has the possibility of a soft landing. The current situation in the United States should be characterized by continued high inflationary pressure and rising risks of economic recession. From the perspective of U.S. stocks, high inflation not only suppresses corporate profits and increases costs, but also causes the Federal Reserve to accelerate the tightening of monetary policy, impacting U.S. stocks from the perspective of valuation and liquidity. Looking back at the two high-inflation periods in the United States in 1972 and 1976, we can also find that during the high-inflation period, the risk of economic recession increased significantly, and the Federal Reserve's monetary policy was constrained by inflation, making it difficult to relax. U.S. stocks are likely to continue to be under pressure.

More than 40 officials have resigned

British Prime Minister Johnson refused to resign

According to CCTV News, on the evening of the 6th local time, after Prime Minister Johnson refused to resign, British Welsh Minister Simon Hart submitted his resignation.

On the 5th, British Health Secretary Sajid Javid and Finance Minister Rishi Sunak resigned one after another. British media analyzed that the resignation of the Minister of Finance and the Minister of Health will severely damage Johnson's government, because these two positions are currently responsible for handling the most important domestic affairs in the UK, namely the rising cost of living and the new crown pneumonia epidemic.

Currently, more than 40 government officials have resigned due to losing confidence in Prime Minister Johnson, more than one-fifth of the total number of government officials.

Previously, Johnson had faced pressure to resign within the ruling party Conservative due to the scandal of illegal gatherings during the epidemic. In early June, Johnson passed a no-confidence vote against him by Conservative members of the House of Commons and was able to remain as leader of the Conservative Party and Prime Minister of the United Kingdom. However, more than 40% of Conservative MPs voted no confidence in that vote.

In June this year, Pincher, the deputy whip of the Conservative Party appointed by Johnson, resigned on June 30 after it was revealed that he molested two men in a club in the UK. Downing Street initially said Johnson was unaware of specific reports of misconduct before appointing Pincher in February. However, a spokesman for the Prime Minister's Office changed his story on July 4, saying that Johnson was aware of some accusations against Pincher, but the incidents involved in these accusations had either been resolved or had not developed into formal charges.This incident raised public doubts about whether Johnson still entrusted Pincher with important tasks despite knowing his character. On the afternoon of July 5, Johnson apologized for appointing Pincher as deputy whip.

Editor: Ye Shuyun

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