China Times (www.chinatimes.net.cn) reporter Shuai Kecong Chen Feng Beijing report
In the early morning of October 8, Beijing time, US stocks fell sharply on Friday, the Dow Jones Industrial Average closed down more than 600 points, and the Nasdaq fell nearly 4%. Apple market value evaporated by about US$85.8 billion (about RMB 610 billion) in a single day.
Chinese stocks listed in the United States followed the U.S. market downward, and Nasdaq China Golden Dragon Index closed down more than 4%. Popular Chinese stocks generally fell, with the stock prices of Alibaba and JD both closing down by more than 3%, while the stock prices of NIO , Ideal Auto, and Xiaopeng Auto all closing down by more than 6%.
The U.S. Department of Labor released data showing that the U.S. non-farm employment population increased by 263,000 in September, exceeding market expectations. The U.S. unemployment rate in September was 3.5%, the lowest level in 50 years. After the data was released, the U.S. federal funds rate showed that the probability of the Federal Reserve hike rate 75 basis points in November rose to 92%, compared with 85.5% before.
html On the morning of October 8, senior US stock investor Chen Da told the reporter of " China Times " that the dual mission of the Federal Reserve's is to ensure employment and low inflation, and there are no two items: protection of the economy and capital market. Now the US unemployment rate has hit a new low in 50 years, but the inflation level has reached a high of 30 or 40 years, and the fever continues to decline. The Federal Reserve can only choose the path of aggressive hike rate , and the stock market has also suffered a setback.Professional institutions pointed out that the market should not have illusions about the Fed's turn to easing. In a research report released in September, CICC stated that the U.S. monetary policy may remain tighter in the next 6-12 months. At the cost, the US economy may enter a recession in early 2023, with the growth rate of GDP dropping to -1.3% throughout the year, and the unemployment rate rose to 5.5% by the end of 2023. This recession may be a "stagflation-style" recession, which lasts for a relatively long time. The yield of US bonds and peaked later, and the US stock market "bottomed" for longer. If we refer to historical experience, the double killing of US stocks and bonds may not end, and it is still a long way from the "economic bottom" and the "market bottom".
Non-agricultural data triggered a "double kill of stocks and bonds"
The Federal Reserve's aggressive interest rate hike is on the string, and strong economic data has also become the "poison" of US stocks.
On October 7th local time, The U.S. Bureau of Labor Statistics released a report showing that the U.S. non-farm employment population increased by 263,000 in September, the smallest monthly increase since April 2021, better than the expected 255,000, and the previous value was 315,000. The U.S. unemployment rate in September was 3.5%, the lowest level in 50 years, below expectations of 3.7%, and was 3.7% earlier than August.
, the highly-watched average hourly wage, increased by 0.3% month-on-month, the same as expected, and the year-on-year increase of 5% and slightly lower than the market's expectations of 5.1%, but is still far higher than the normal level before the epidemic. This report means that although the Fed has been hiking interest rates and weakening economic growth, the US economy and employment situation continue to strengthen.
The next Fed interest rate meeting will be from November 1 to 2, while the first Friday of November is November 4, so this is the last non-farm data report before the interest rate meeting. After the data was released, market expectations for the Fed's aggressive interest rate hikes have heated up sharply again. The U.S. federal funds rate showed that the probability of the Federal Reserve hike of a 75 basis point rate in November rose to 92%, higher than the 85.5% before the September non-farm employment report was released.
At the same time, major U.S. stock indexes fell collectively, and yields of US dollar and U.S. Treasury bonds rose. USD index hit a new high in more than a week, approaching 112.9 at one point. The 2-year U.S. Treasury yield, which is more sensitive to interest rate outlook, once reached 4.34%, approaching the 2007 high hit last Monday, with the 10-year Treasury yield rising 8 basis points to 3.898%.
As of the close of US stocks on Friday, the Dow Jones Industrial Average fell 630.15 points or 2.11%, to 29296.79 points; the Nasdaq fell 3.8%, to 10652.40 points; and the S&P 500 fell 2.8%, to 3639.84 points. All three major indexes have seen their biggest decline since September 13.
11 sectors of the S&P 500 index fell across the board, with the information technology block closing down 4.14% to lead the decline, the optional consumer sector fell more than 3.5%, and the energy sector fell more than 0.7% to the bottom.
Despite this, thanks to the good rise in the first half of this week, especially the sharp rise on Tuesday, U.S. stocks continued to rise overall this week. Tonglian data shows that the Dow Jones Industrial Average rose 1.99% in one week, Nasdaq rose 0.73% in a cumulative increase, and the S&P 500 rose 1.51%.
Apple market value evaporated by 610 billion
In Friday's trading, technology stock , which relies on huge liquidity to support the valuation, became the biggest loser. Apple's stock price closed down 3.67%, Microsoft 's stock price closed down 5.09%, Google 's stock price closed down 2.7%, Amazon 's stock price closed down 4.77%, Meta's stock price closed down 4.04%, and Tesla 's stock price closed down 6.32%.
Tonghuashun iFind data shows that the total market value of the above six major technology stocks is about US$7.51 trillion, with a total market value of more than US$330 billion (about RMB 2.35 trillion) per day.
Among them, Apple's market value lost about US$85.8 billion (about RMB 610 billion), Microsoft's market value lost about US$93.6 billion, Google's market value lost US$35.7 billion, Amazon's market value lost about US$58.5 billion, Tesla's market value lost about US$47.2 billion, and Meta's market value lost about US$15.1 billion.
In addition, due to performance below expectations, the share price of chip giant AMD closed down 13.8% to US$58.44 per share, the largest single-day decline since March 2020, and its market value shrank to about US$94.3 billion.
AMD released preliminary results for the third quarter after the market trading Thursday, showing that the company's revenue is expected to be about US$5.6 billion, while the previous guidance is US$6.5-6.9 billion; the adjusted gross profit margin is expected to be around 50%, while the previous guidance is close to 54%. At present, many institutions including Bank of America Securities and Wells Fargo have lowered AMD's target share price.
Chinese stock index fell by more than 4%
It is worth noting that Chinese stocks also followed the US stock market and suffered a heavy blow. The Nasdaq China Golden Dragon Index closed down 4.11% on Friday to 6081.28 points.
Tonghuashun iFind data shows that among the more than 260 Chinese stocks listed in the United States, as many as 203 stocks closed down, and nearly 80 stocks fell by more than 5%.
popular Chinese stocks generally fell, Alibaba's stock price fell 3.65%, Pinduoduo 's stock price fell 2.6%, JD.com's stock price fell 3.39%, NetEase's stock price fell 2.23%, Beike 's stock price fell 4.61%, NIO's stock price fell 6.84%, Ideal Auto 's stock price fell 6.59%, Xiaopeng Motors' stock price fell 6.34%, Shanghe's stock price fell 13.05%, Bilibili's stock price fell 3.92%, and iQiyi's stock price fell 5.41%.
Editor: Ma Xiaochao Editor-in-chief: Xia Shencha
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