February 14th is the traditional Valentine's Day in the West, and it is also the fifth day of the Lunar New Year here, according to the traditional custom of the fifth day of the Lunar New Year is to pick up the God of Wealth, I don't know if the Americans have such a custom, but it is certain that the "God of Wealth" of the US stock market in the early morning of Valentine's Day ran away.
That night, all the three major U.S. stock indexes were **,The Dow Jones and the S&P 500 fell 135% and 137%, the Nasdaq fell the most, reaching 18%。How did U.S. stocks, which have been strong since 2024, languish overnight? Who drove away the "God of Wealth"?
The U.S. Department of Labor has to carry the blame.
By the way, on February 13, there was sad news that Zhao Anji, a Chinese-American businessman whose father was the founder of the Fumao Group, died in a car accidentAnd my sister served as the secretary of labor in the United StatesHe was the first Chinese-American cabinet secretary in the United States.
According to the U.S. Department of Labor, the U.S. CPI in January 2024 was **31%, 03%。As soon as the news came out, the market immediately ushered in a strong reaction, the dollar index instantly rose by 50 basis points, and non-dollar currencies depreciated across the board, ** The U.S. stocks that opened later reacted even more, and the three major stock indexes all fell more than 1% after that, and the Nasdaq fell nearly 2%.
The market is so focused on the US price index because it is closely related to the Fed's monetary policy.
Everyone should know that in order to curb inflation, the United States will raise interest rates from March 2022, and the federal ** interest rate has been at 5 for most of the year since July last year25% to 5At a high level of 5%, tight monetary policy is extremely detrimental to capital markets. Previously, prices in the United States began to decline, from the peak of more than 9% year-on-year to less than 4% year-on-year, the capital market gamblers began to bet on the Federal Reserve to change its monetary policy in March, and the expectation of interest rate cuts made the US stock market soar like a stimulant.
The January CPI data released by the Labor Department poured cold water on the good expectations.
CPI year-on-year **31%, although not low, but compared with the previous has been significantly narrowed, why is the market still not satisfied? The reason is just four words, beyond expectations.
Before the data was released on the evening of February 13 (Beijing time), Wall Street generally ** US CPI for January was 29%, the psychological implication of returning to the "2" mark is significant, you must know that the Fed's long-term inflation target is 2%. Everyone was ready to open champagne to celebrate, but in the end they were "slapped in the face" by the actual result. To say that the U.S. Department of Labor really doesn't understand the worldWall Street needs a year-over-year CPI growth rate of less than 3%, and the Labor Department gives a figure of 31%，This puts a big question mark on the expectation of interest rate cuts.
According to a tracking data from the Chicago Mercantile Exchange, after the release of the CPI in January, the market expects that the probability of the Fed keeping interest rates unchanged in March has risen to more than 90%, and the rate cut next month will be completely "stopped". What is even more regrettable is that the probability of a 25 basis point rate cut in May is less than 35%, and the probability of keeping interest rates unchanged is more than 6%.
Radicals in the market have been betting on the Fed to cut interest rates in March, and calmer investors believe that the current cycle of interest rate cuts will start in MayFed Chair Jerome Powell has plenty of confidence to delay the decision to cut interest rates.
Among the listed companies with the three major stock indexes, a technology company called ARM is the most interesting. Many people may first hear the name Arm, a UK-based company with a small history and an indispensable link in the field of semiconductor chips.
When it comes to chips, everyone's first reaction is TSMC, Samsung, Intel, Apple, Qualcomm, Nvidia, etc., almost no one mentions Arm, in fact, the latter has more dominance in its own field than the previous companies.
In the field of chip foundry, TSMC is a strong one, accounting for 60% of the global market share, followed by Samsung, followed by UMC, SMIC, etc.; In the field of design, Apple, Qualcomm, MediaTek, AMD, etc. have their own strengths, and Nvidia has sprung up with AI chips and has become the high-tech company that attracts the most attention in the market in 2023, and its market value once surpassed that of Amazon and Google.
ARM is an architecture, which can be simply understood as the drawings used by chip design companies, and no one in this field can be unsurpassed, especially smartphone chips, which are almost all based on ARM architecture. This is a company whose revenue and net profit cannot be compared with giants, but the degree of monopoly in its own field is enough to make any giant ashamed.
On February 7, ARM released its financial report after the U.S. stock market, due to the performance that exceeded market expectations and the optimism about AI chips, capital began to chase ARM frantically, and its stock price fell by 48% on February 8The next two trading days rose as high as $164, and the ** price three trading days ago was only 7701 USD,In other words, it rose by up to 113% in three days.
However, ARM's share price took a heavy hit after the release of the US CPI data for JanuaryFebruary 13 single day **1946%, and the market value evaporated by nearly 30 billion US dollars (more than 210 billion yuan). The ups and downs of ARM's stock price may be the epitome of the United States, the "God of Wealth" was driven away by the data released by the U.S. Department of Labor, but short-term fluctuations cannot change the long-term upward trend of U.S. stocks, which may be the opposite of that of another economic power.
The above is purely a personal point of view, welcome to follow and like Wang Wu said that your support is the best encouragement for originality!