Editor of Economic News: Cheng Peng, Yi Qijiang
On the 7th local time, the three major U.S. stock indexes closed down sharply, the Dow Jones Industrial Average fell 2.1%, the S&P 500 fell 2.8%, and the Nasdaq Composite fell 3.8%.
analysis believes that Feder continues to be aggressive hike rate , and the US economy may be in trouble in the future, which continues to put pressure on investor sentiment, and the US stock market may continue to fluctuate in the future.
In addition, on the 7th local time, Mayor Eric Adams of New York City, USA declared a state of emergency in the city to help deal with the immigration crisis in New York City.
Employment Report Strengthens Radical Expectations of Rate Raise
Nasdaq Slashed 3.8% to lead the decline of the three major indexes
US stocks opened low on Friday (October 7), and all three major indexes recorded a big drop.
As of the close, Dow Jones Index fell 630.15 points, or 2.11%, to 29,296.79 points; S&P 500 Index fell 104.86 points, or 2.80%, to 3,639.66 points; Nasdaq Index fell 420.91 points, or 3.80%, to 10,652.41 points, and fell more than 4% during the session.
Due to the outstanding performance on Monday and Tuesday, the three major indexes still maintained their gains on the weekly line. The Dow Jones Index rose 1.97%, the S&P 500 Index rose 1.51%, and the Nasdaq Index rose 0.73%.
Recently, OPEC+ also announced a significant reduction in production to boost oil prices, adding a lot of upward pressure to US prices. On Friday, the strong non-farm report sparked panic in the market about the Fed's expectations of an active rate hike, and the three major indexes gave up a considerable portion of the weekly gains.
According to CCTV News, data released by the U.S. Department of Labor on the 7th showed that the U.S. unemployment rate in September this year was 3.5%, with an expected 3.7%. The number of new jobs in the non-agricultural sector was 263,000, and the Dow Jones estimated to be 275,000.
data showed that the U.S. unemployment rate fell by 0.2 percentage points month-on-month to 3.5%. However, the number of long-term unemployed people who have been unemployed for more than 27 weeks remains at 1.1 million in the month, accounting for as much as 18.5% of all unemployed people. In addition, the labor participation rate of fell by 0.1 percentage point to 62.3% that month, indicating that the supply and demand relationship in the labor market is still tense.
According to industry, the number of employment in the leisure and hotel industry increased by 83,000 in the month, still 1.1 million lower than before the epidemic.
Analysts believe that the number of new non-agricultural jobs in the United States in September was lower than market expectations, and was lower than the monthly average since 2022, and less than the average monthly growth of 562,000 in 2021, indicating that the Federal Reserve's aggressive interest rate hike measures have had a negative impact on the labor market.
In addition, the federal funds rate shows that the probability of the Federal Reserve hike rate by 11 is 92%, which is far higher than market expectations. According to CME's "Federal Observation", before the above report was released, the probability of the Federal Reserve raising interest rates by 50 basis points to the range of 3.50%-3.75% in November was 22.9%, the probability of 75 basis points was 77.1%, and the probability of 100 basis points was 0%; the probability of 100 basis points was 18.4% by December was 125 basis points, the probability of 125 basis points was 66.6%, and the probability of 150 basis points was 14.9%.
According to Cailianshe, Bleakley Financial chief investment officer Peter Boockvar said the change in non-farm employment roughly meets expectations, but the market seems to be particularly concerned about the decline in unemployment rate. On this basis, there are also the low initial request announced on Thursday, which gives the Fed reason and ability to continue to tighten.
Wells Fargo stock analyst Christopher Harvey told the media, "The conclusion we communicated with many people is that the Federal Reserve will not help the financial market, but will only pursue price stability. Until the market has problems, they should not change their course."
Tesla fell more than 6%, Apple fell more than 3% 670 billion giants plummeted nearly 14%
S&P 500 index 11 sectors fell across the board. The information technology/technology sector closed down 4.14% to lead the decline, the optional consumer sector fell by more than 3.5%, Telecom , raw materials, real estate, finance, health care, and utilities sectors fell by more than 2.8%, and the energy sector fell by more than 0.7% and the smallest decline.
Large technology stocks all fell, (ranked by market value) Apple fell 3.67%, Microsoft fell 5.09%, Google fell 2.61%, Amazon fell 4.77%, Tesla fell 6.32%, and Meta fell 4.04%.
Among them, Apple (AAPL, stock price of US$140.09, market value of US$2.3 trillion) evaporated overnight by US$85.819 billion (about RMB 610.688 billion).
Tesla (TSLA, stock price of US$223.07, market value of US$698.98 billion) evaporated overnight US$47.2 billion (about RMB 335.9 billion).
chip sector fell sharply, and Philadelphia Semiconductor Index closed down more than 6%. AMD fell 13.87%, Nvidia fell 8.03%, and Intel fell 5.37%.
Previously, chip giant AMD, with a market value of approximately US$94.341 billion (equivalent to RMB 671.3 billion), announced its third-quarter performance forecast far lower than market expectations, and the company warned that demand for PC business slowed down significantly. And Wall Street also responded to the company: collectively lowered its target price.
Goldman Sachs lowered AMD's target price from $88 to $84, and said it lowered its forward-looking estimates for AMD and Intel. While AMD's customer segment revenue has significantly shrunk (-53% quarter-on-quarter in Q3 2022) may facilitate further discussion on normalization of PC demand, a constructive view on the stock remains.
Susquehanna lowered AMD's target price from $95 to $85. They said the risk was highlighted last week in the latest personal computer industry report, lowering the expected/target price of Intel, AMD and Nvidia. However, this AMD performance forecast may mean that things will be worse. Next, Intel may also hand over a disappointing third- and/or fourth-quarter report card.
Ruisui Bank lowered AMD's target price from $125 to $102. They believe AMD has pre-reported its September results with revenue and gross margins of $5.6 billion and 50%, respectively, far below previous guidance. As the PC/server market weakens, AMD is even weaker than people are worried about.
Stifel cuts AMD's target price from $122 to $100. They now expect AMD non-GAAP EPS to be $0.69 in the third quarter, compared with the previous estimate of $1.06. But they expect new product launches and continued growth in market share will drive the year-on-year growth rate of revenue in the second half of 2023.
Chinese stocks listed in the United States fell overall, and Nasdaq China Golden Dragon Index fell 4.11% to 6081.28 points.
All popular Chinese stocks closed down, NIO fell 6.84%, Ideal Auto fell 6.59%, Xiaopeng Motor fell 6.34%, Good Future fell 4.40%, Alibaba fell 3.65%, Tencent Music fell 3.41%, JD fell 3.39%, Pinduoduo fell 2.60%, New Oriental fell 2.49%, and Baidu fell 1.82%.
New York City, USA, declared a state of emergency to respond to the immigration crisis
According to CCTV News, on the 7th local time, New York City Mayor Eric Adams, announced that the city was in a state of emergency to help deal with the immigration crisis in New York City.
Adams said on October 7: "Immigrants arriving in New York City have exceeded the number of people we can accommodate immediately." Adams said that once asylum seekers who came to New York by bus from Texas are placed properly, the number of people that the city's asylum system can accommodate will reach the highest on record.
Adams called on federal and state governments to provide assistance, and he estimated that the immigration crisis in New York would cost about $1 billion this fiscal year.
Image source: Photo Network-501518924
According to statistics from New York City Hall , has more than 15,000 immigrants have arrived in New York City since May this year. According to recent reports from the US media, as the shelter centers used to receive immigrants in New York City are already full, New York City Mayor Adams is considering using cruise ships to accommodate immigrants. It is understood that Adams plans to dock the cruise ship that resettled to immigrants at south of Manhattan , but local officials in Staten Island do not support the plan. Republican officials in New York City criticized the plan as "ridiculous" and "incompetent".
This spring, Texas Governor Abbott and Arizona Governor Ducey successively launched "carrying people" operations, using buses to transport Latin American immigrants to cities dominated by Democrats such as Washington and New York to show opposition to the federal government's immigration policy. As the November midterm election approaches, the struggle between the two parties in the United States becomes increasingly fierce, and immigration policy once again becomes a focus of firepower for the Republicans to attack the Democratic Party.
According to CNN (CNN) on October 6 local time, the police in Hidalgo County, Texas, USA said on the same day that 84 undocumented immigrants were found on semi-trailer in Weslaco, about 8 miles (about 12.9 kilometers) north of the U.S.-Mexico border.
It is reported that the police received a report from a resident that there may be an smuggling of in the local area. Police found the illegal immigrants while investigating the incident. The incident is under further investigation.
editing | Cheng Peng Yi Qijiang
proofreading | Zhao Qing
cover image Source of film: Photo Network-501518924
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