On the evening of the 19th, Beijing time, US stocks opened lower on Wednesday. The yield on U.S. Treasury bonds rose sharply, with the 10-year U.S. bonds yield breaking through 4.1% to hit a new high since the financial crisis in 2008, indicating that the risk of a recession in the United States has increased. The market continues to evaluate Netflix's financial reports and evaluates the aggressive Fed's interest rate hike policy and its impact on the US economy.
Dow Jones fell 84.76 points, or 0.28%, to 30439.04 points; Nasdaq fell 70.15 points, or 0.65%, to 10702.25 points; S&P 500 fell 22.08 points, or 0.59%, to 3697.90 points.
U.S. Treasury yields remained at high levels and continued to climb on Wednesday, showing that market concerns about the recession remained deeply rooted.
U.S. Treasury yields collectively rose significantly early Wednesday. Among them, the benchmark 10-year U.S. Treasury yield returned to above 4%, rising to 4.11%, the highest level since the 2008 financial crisis. The yield on the 2-year Treasury bond rose to 4.5138%. The inversion of the yield curve of
2-year Treasury bonds and 10-year Treasury bonds has expanded. Often, the inverted Treasury yields of these two Treasury yields is seen as a signal that the U.S. economy is about to (or already) falls into recession. A latest forecast yesterday showed that the probability of the United States falling into recession in the next 12 months is 100%, and the figure was still 65% the last time it was forecast.
Since the beginning of this year, the Federal Reserve has raised interest rates by 300 basis points, but even under such radical policies, the U.S. inflation rate remained at a 40-year high in September. The latest Fed meeting minutes show that the Fed is likely to continue to raise interest rates sharply in November and December.
But many respondents said that the interest rates in the United States have reached an unhealthy range, which will further undermine the stability of the US economy. Fitch, one of the three largest rating agencies in the world, also warned yesterday that the U.S. economy may fall into a moderate recession from the spring of 2023 and lower its growth forecast for next year to 0.5% from the previous 1.5%.
Citi Quantitative strategists said that the pricing of the U.S. stock market reflects that the possibility of a U.S. recession is higher than any other asset class, and the recession will cause greater losses.
Citi strategist led by Alex Saunders wrote in the research report: "The recession is the biggest risk facing the U.S. stock market, and it has not been fully reflected in the pricing of U.S. stocks. Earnings expectations need further adjustments. The U.S. bond market has the least pricing risk. But given the Federal Reserve's hawkish stance, it will take some time for the bond market to respond to the risk of recession."
DataTrek Research analyst Nick Colas said: "In the context of current oversold stocks and lower expectations, corporate financial reports may boost investor confidence to some extent. However, unless we see 2- and 10-year Treasury yields begin to decline, traders and investors should still be wary of not expecting too high expectations for the current stock market rise."
US stock earnings season started well, but many people on Huajie Street have lowered their expectations for U.S. corporate profits, and investors are also worried that the U.S. economy will fall into a recession.
Story giant Netflix shares rose after the company announced that revenue and profit exceeded expectations, and the number of subscribers increased strongly in the third quarter. United , Intuitive Surgery and Procter & Gamble and other companies have all released strong quarterly financial reports.
Starting next week, technology companies' financial reports will be released in a intensive manner. IBM and Tesla will announce their financial reports on Wednesday. Social media company Snap will announce its results later this week.
economic data, the Federal Reserve will announce the economic prosperity on Wednesday Beige Book , and Central Bank will explain the current economic situation.
focus stock
According to the information on the official website of Apple Japan, after the release of the new generation iPad, Apple increased the price of iPad mini and iPad Air on sale. The starting price of the iPad mini has increased from the previous 72,800 yen to 78,800 yen, and the iPad Air has increased from 84,800 yen to 92,800 yen.
Netflix's third-quarter performance exceeded expectations.
Adobe reiterates current quarterly expectations.
IBM will announce its financial report after the market close on Wednesday.
Asma's third-quarter performance exceeded expectations, and it is expected that the new regulations will have limited direct impact on shipments next year.
United Continental Airlines' third-quarter performance was strong, and its profit guidance in the fourth quarter exceeded expectations.
Intuitive Surgery Company's earnings per share and revenue exceeded expectations for the third quarter.
Olaplex lowers its revenue guidance for fiscal year 2022.
Jefferie downgraded Philips to "underperform Big market ".
Morgan Stanley lowered Moderna's target price to $175.
