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Economic Growth Prospects are Negative; Tech Stocks Turbulent

Summary

The S&P 500 index fell to a two-week low last Friday. Large technology stocks continued to reverse the gains that occurred after the Fed’s policy meeting. Options and futures expiration near the end of the quarter have also magnified the stock market trend. Previously, European and American central banks have shifted to tightening policies at different speeds, placing the containment of inflation on a more important position than protecting output and employment. Some analysts warned that the Fed’s upcoming tightening cycle may end as soon as possible. The recent plunge in long-term Treasury yields indicates that economic growth may be at risk.

In this context, investors suspect that the stock market may usher in a tougher outlook, and high-value stocks such as the technology sector are also attracting attention. Large technology stocks such as Apple, Tesla, and Amazon rose sharply after the Federal Reserve issued its policy decision last Wednesday. The turmoil in technology stocks underscores the market's concerns about the Fed's shift to anti-inflation and economic growth prospects as the number of new crown cases increases. Raising interest rates will put pressure on highly valued stocks, especially when profit growth slows.


Anna Han, a stock strategist at Wells Fargo Securities, said that despite the strong market liquidity and many easing measures, the directional changes and the timetable for downsizing have advanced, as well as the possible interest rate hike timetable... What we are seeing is a change in speed , The market is trying to digest all this. Blanke Schein Wealth Management Chief Investment Officer Robert Schein said that our advice to investors is to keep investing but be cautious. Although it’s usually a wise idea to keep investing in periods of downturns or volatility, it’s important for investors to understand their own risk tolerance.” LPL Financial stock strategist Jeffrey Buchbinder pointed out that before the Federal Reserve starts raising interest rates, energy Cyclical value sectors such as, materials, and industries generally perform well. When the new wave of epidemic passes, when the economy accelerates, value stocks will rise again.


This week (the week of December 20th-26th), investors will continue to pay close attention to the development of the Omi Keron variant. At the same time, the Fed’s latest policy meeting has made tougher language, which will also be the main event that will attract market attention this week. This week, the United Kingdom and the United States. The GDP data of Canada and other countries will be released, while the US PCE price index and Japanese CPI data will also receive attention. In terms of central banks, the Reserve Bank of Australia and the Bank of Japan will announce the minutes of their monetary policy meetings. In addition, this Friday is Christmas Eve. The New York Stock Exchange and the market will be closed due to Christmas holidays. The Hong Kong Stock Exchange will only trade in early trading; The market was closed for one day on Christmas Eve.


① On Monday (December 20), New Zealand's November trade account, and the UK's December CBI industrial order difference.

② On Tuesday (December 21), the German January Gfk consumer confidence index, the UK December CBI retail sales difference, the Canadian October retail sales monthly rate, the US third quarter current account, the Eurozone December consumer confidence index , The Reserve Bank of Australia announced the minutes of its monetary policy meeting.

③ On Wednesday (December 22), the third quarter GDP annual rate of the United Kingdom, the third quarter real GDP of the United States, the third quarter consumer spending, the third quarter core PCE price index and the December Consultative Council Consumer Confidence Index, the Bank of Japan announced Minutes of the October Monetary Policy Meeting.

④ On Thursday (December 23), the US November PCE price index, US November personal spending, Canada's October seasonally adjusted GDP, US December University of Michigan consumer confidence index, and Bank of Japan Governor Haruhiko Kuroda delivered speeches.

⑤ Friday (December 24), Japan’s November national CPI data.


Risk Warning: The above content is for reference only, and does not represent JRFX’s position. JRFX does not assume any form of loss caused by any trading carried out in accordance with this article. Please consult your financial planner for your investment portfolios and manage your own risk.


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