On the evening of the 7th, Beijing time, US stocks continued to decline in early Friday, with the Dow Jones Industrial Average falling 300 points and the Nasdaq fell 2%. The U.S. non-farm employment data in September exceeded expectations and the unemployment rate continued to decline, which made the market predict that the possibility of the Federal Reserve's interest rate hike by 275 basis points increased, and was worried that the Federal Reserve's aggressive interest rate hike policy would put the United States in its second recession in four years.
Dow Jones fell 302.92 points, or 1.01%, to 29,624.02 points; Nasdaq fell 222.83 points, or 2.01%, to 10,850.48 points; S&P 500 fell 50.67 points, or 1.35%, to 3,693.85 points. After the non-farm employment report was released, U.S. Treasury yields rose. The yield on the 2-year Treasury bond rose by 8 basis points to 4.31%, and the yield on the 10-year Treasury bond rose by 8 basis points to 3.898%.
On Friday morning, the U.S. Bureau of Labor Statistics reported that the number of non-farm employment in the United States increased by 263,000 in September, the smallest increase since April 2021. It is estimated to increase by 255,000, and increase by 315,000 in August. The unemployment rate in September was 3.5%, with an estimate of 3.7%, and the previous value was 3.7%. The
report also showed that the change in the total number of non-farm employment in July was revised up by 11,000, from 526,000 to 537,000; the total number of non-farm employment in August remained unchanged at 315,000. After the correction, the combined employment growth in July and August was 11,000 higher than previously reported.
average hourly wages have steadily increased. The average hourly wage in the United States increased by 5% year-on-year in September, with an expected increase of 5.1%, and a value of 5.2% before August. The average hourly wage in the United States increased by 0.3% month-on-month in September, and expected to increase by 0.3%, and the value before August increased by 0.3%.
09 average hourly wage increased by 10 cents from the previous month to $32.46.
99 labor force participation rate was 62.3%, compared with the previous August value of 62.4%. "If unemployment remains low and wage growth remains stable, the Fed may continue to raise interest rates and stick to a quantitative tightening plan of $95 billion a month," said AJ Bell analysts. Dennis, founder of
22V Research "This is a bad report. The focus is that the unemployment rate has dropped from 3.7% to 3.5%, and the labor participation rate has dropped to 62.3%. People are worried about a drop in unemployment rate. This is reasonable. Coupled with the strong overall data, this can be called a report supporting hawks." After the September non-farm data was released, the federal funds rate showed that the probability of the Federal Reserve hike 275 basis points in November was 92%, higher than the 85.5% before the September non-farm employment report was released.
CME "Federal Observation" shows that the probability of the Federal Reserve raising interest rates by 50 basis points to the range of 3.50%-3.75% in November is 25.7%, the probability of raising interest rates by 75 basis points is 74.3%, and the probability of raising interest rates by 100 basis points is 0%; the probability of raising interest rates by December is 20.2%, the probability of raising interest rates by 125 basis points is 59.1%, and the probability of raising interest rates by 150 basis points is 20.7%.
One of the Fed’s biggest concerns is the rise in wages caused by tight labor markets, and higher wages may make inflation more difficult to control.
Most analysts expect the Fed to continue hike rates until inflation begins to drop rapidly and the imbalance between too few jobs and too many job openings can be alleviated.
But raising interest rates will push up the borrowing costs of buying high-priced goods such as cars, thereby curbing consumer spending.
analysts believe the biggest question is whether the United States will fall into a second recession in four years. Many economists believe this is inevitable. Dan North, senior economist at Allianz Trading North America, said there is now quite convincing evidence that the United States is heading for recession.
19 Fed officials' latest median forecast shows that the Fed will raise interest rates by another 1.25 percentage points in the remaining two meetings this year. Global market turmoil has intensified in recent weeks, while the Federal Reserve is still releasing its eagle and has not softened its position to the outside world.
Investors expect the Fed to raise interest rates by 75 basis points at its November meeting. The Federal Reserve's forecast shows that it will raise interest rates by another 25 basis points next year, and the policy will remain at a restrictive level until at least 2024.
On Thursday, five Fed officials delivered intensive speeches to convey a firm hawkish message, who still believe inflation is too high and volatility in financial markets will not stop them from hiking interest rates.
Federal Director Lisa Cook Speaking at the Peterson Institute for International Economics on Thursday, saying the Fed needs to keep interest rates at a restrictive level "until we are convinced that inflation is firmly moving towards our 2% target."
Federal Director Waller said in a speech at the University of Kentucky that monetary policy shifts should not be sought for financial stability.
2022 FOMC voter and Cleveland Fed Chairman Mestre reiterated on Thursday that inflation is unacceptable and there is no reason to slow down the pace of interest rate hikes.
Chicago Fed Chairman Evans said that the US inflation is too high, which is the Fed’s most concerned issue and should adopt stricter monetary policies.
Minneapolis Fed Chairman Kashkali said that U.S. inflation has not peaked and the Fed's pace of hikes will not stop.
Several of the largest U.S. banks will begin to release their third-quarter financial results next Friday. The market expects bank performance to show a decline in net profit as market turmoil curbs investment banking activities and banks allocate more emergency funds to compensate for the losses caused by borrowers' default repayments.
data shows that analysts expect JPMorgan profit to fall by 24%, while Citigroup and Wells Fargo net profit is expected to fall by 32% and 17% respectively.
Analysts also expect Morgan Stanley profit to fall by 28%, while its rival Goldman Sachs will drop by 46%, as corporate interest in mergers and IPOs is weakened; Bank of America profit is expected to fall by nearly 14%, and strong growth in its consumer sector is expected to partially offset the decline in consulting fees.
focus stock
Tesla is said to deliver Semi electric semi-trailer truck to Pepsi in December. Tesla CEO Musk said on social media on Thursday that Tesla will hand over Semis to Pepsi on December 1.
Musk reiterated that according to the plan, the truck can travel 500 miles (about 805 kilometers) on one charge. Pepsi ordered 100 Semi electric trucks in December 2017, when the truck was just one month after it was released.
Musk said when Tesla first launched Semi in November 2017 that it will be put into production in two years. Pepsi, , Walmart, and other companies have paid deposits earlier, but Semi did not achieve the first batch of delivery until December this year.
If Musk's latest announced timetable is realized, this semi-truck will be the first new model Tesla has delivered to customers since early 2020. Musk had previously stated that Tesla does not intend to launch any new models into the market in 2022.
Twitter said on Thursday that Musk should now schedule a deal to close on October 10, but Musk refused to make a commitment on any potential closing date.
A bank said Musk has not disclosed to them the date he completed the transaction. "Musk 'can and should' complete the deal next week," said Twitter , and he also opposed Musk's motion to "request the Delaware Equity Court to stop hearing the merger and acquisition case."
Credit Suisse plans to repurchase US$3 billion in debt, and market sentiment improves. Credit Suisse Group announced on Friday that Credit Suisse International proposed to repurchase some OpCo senior debt securities in cash, with an amount of up to about 3 billion Swiss francs .
Credit Suisse announced on Friday that it is making cash offers on eight high-end debt securities denominated in euros or pounds, with a total consideration of no more than 1 billion euros. At the same time, Credit Suisse also announced a separate cash offer for 12 USD-denominated senior debt securities, with a total price of no more than US$2 billion.
AMD The preliminary revenue data for the third quarter is far lower than the guidance. The company released its initial fiscal quarter results after Thursday, with revenue of approximately $5.6 billion, compared with previous guidance of $6.5-6.9 billion; adjusted gross profit margin is expected to be around 50%, while previous guidance is close to 54%. AMD said the decline in revenue was because "the PC market was weaker than expected, and major inventory correction actions for the entire PC supply chain."
major banks intensively lowered AMD's target price.KeyBanc reduced AMD's target from $130 to $100; Mizuho reduced AMD's target price from $125 to $102; Raymond James reduced AMD's target price from $130 to $100; Piper Sandler reduced AMD's target price from $140 to $90.
Google plans to set up its first Japanese data center, which will accelerate its Asian business. Google CEO Sundar Pichai said in an interview on Friday that within the four years of 2024, Google plans to invest a total of 100 billion yen (about 690 million US dollars) in Japan, with some of the funds going to open Google's first data center in Japan. Google reportedly plans to build a data center in Chiba Prefecture near Tokyo next year, aiming to ensure faster and more stable access to Google services.
