On Thursday, the stock market in the United States exhibited strong performance, with all three major indices—the Dow Jones Industrial Average, the S&P 500, and the Nasdaq—recording notable gainsIn particular, both the Nasdaq and the S&P 500 surged by over 1%, reflecting positive investor sentiment and market dynamics.
Chinese stocks listed in the U.S. also followed the upward trend, as evidenced by the Nasdaq Golden Dragon China Index, which rose by more than 1%. This increasing interest in Chinese firms suggests recovering confidence from investors who are eager to tap into growth potential and innovations stemming from China's tech landscape.
From an economic perspective, the PPI (Producer Price Index) data for January revealed a surprising upward trend in inflation, further underscoring rising inflationary pressures within the U.S. economyCoupled with the previously released CPI (Consumer Price Index) data, it casts doubt on market expectations for interest rate cuts by the Federal Reserve within the year, leading some analysts to reassess their forecasts for monetary policy.
Economists from Deutsche Bank have predicted that as inflation data, particularly the CPI figures from January, exceeded expectations, it is now unlikely that the Federal Reserve will enact any interest rate cuts until 2025. This assertion highlights the Fed's cautious stance in navigating the complex economic landscape.
In terms of political developments, President of the United States made headlines on February 13 via social media, announcing plans to implement "reciprocal tariffs." This policy aims to equalize trade duties, suggesting a potential increase in tariffs on countries employing a value-added tax system
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However, the timeline for implementing these tariffs remains unspecified, stirring speculation and concern among traders and economists alike.
01 U.SStock Indices Close Higher
According to data from Wind, by the end of trading, the Dow Jones increased by 342.87 points, reflecting a rise of 0.77%, closing at 44,711.43 points; the Nasdaq soared by 295.69 points, marking a gain of 1.50%, at 19,945.64 points; while the S&P 500 added 63.10 points, or an increase of 1.04%, ending at 6,115.07 pointsThis rally paints an optimistic picture about market stability and recovery.
Major technology stocks collectively demonstrated significant gainsFor instance, Apple rose by 1.97%, Microsoft by 0.37%, while Google’s shares increased by 1.38%. Amazon, Meta, and Tesla also saw rises, with Tesla's shares jumping an impressive 5.77%. Intel, for its part, experienced an even more dramatic increase of 7.34%, reflecting heightened interest in the tech sector.
On February 14, Apple's CEO Tim Cook shared a 7-second teaser video on social media, accompanied by the phrase “Get ready for a new member of the family”. The video featured a brief animation of the Apple logo, along with an enigmatic reference to February 19, promising an event where at least one new product would be revealedThis keeps the anticipation high among tech enthusiasts and investors alike, as the company continues to innovate.
In the global landscape of Chinese stocks, movements were mixedThe Nasdaq Golden Dragon China Index managed a rise of 1.2%, with major firms like Alibaba climbing by 1.02%, JD.com by 0.71%, and Pinduoduo leading the pack with a leap of 2.88%. Conversely, Baidu and NetEase faced challenges, with shares dropping by 3.48% and 3.97%, respectively, highlighting the volatility of these markets.
02 UBS Predicts No Rate Cuts by the Fed until 2025
On February 13, the U.S
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Bureau of Labor Statistics released data regarding the PPI for January, alongside the report on initial unemployment claims from the previous week.
The findings revealed a year-on-year increase in the PPI of 3.5% for January, which surpassed the expected 3.2%. The previous month’s PPI has also been adjusted from a 3.3% increase to 3.5%. Month-on-month, the PPI exhibited a 0.4% rise, beating the forecast of 0.3%. The adjustments underscore the inflationary pressures felt across sectors.
Analysts suggest that this spike in the PPI may solidify the consensus among economists that the Fed is unlikely to alter interest rates until after SeptemberDespite some fluctuations in recent economic reports, the labor market in the U.S. remains robust, with solid consumer demand restricting the Fed's opportunity for aggressive rate cuts.
Deutsche Bank reaffirms its position that, following the CPI surpassing expectations in January, the Fed is unlikely to cut rates before 2025, challenging assumptions about immediate monetary easing.
Furthermore, Deutsche Bank notes that while rate hikes are not off the table, there would be considerable hurdles to overcomeNotably, they stress that a robust labor market and a core PCE inflation rate rising closer to 3% or more would be prerequisites.
03 U.SPresident Announces Reciprocal Tariffs
On February 13, the President announced the decision to impose "reciprocal tariffs", aiming to establish equal tariff rates between the U.S. and its trading partners
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The potential impact of this policy looms large as trade tensions continue to evolve.
During the signing of the memorandum in the Oval Office, the President stated, "For the sake of fairness, I have decided to implement reciprocal tariffs, meaning we will charge the same tariffs as other countries charge against us, no more, no less." This statement reinforces the administration's focus on addressing trade imbalances.
The memorandum cited the need to "reduce the large and ongoing trade deficit in goods" and tackle "other unfair and imbalanced trade issues" with foreign partnersThe implications for participating economies are vast, stirring potential reactions and strategic shifts in international trade relations.
While the timing for the implementation of these reciprocal tariffs has not been concretely outlined, analysts believe that the President's announcement could initiate the process of establishing these tariffsWhite House officials hinted that action could be expedited, indicating a timeline of "weeks" rather than "months" for the realization of tariff measures.
04 Gold Prices Rise, Oil Prices Fall
In the precious metals market, gold prices witnessed a significant rise on Thursday as the dollar index and U.STreasury yields fell, driving the international gold price to new historic closing highsSpecifically, April gold futures closed at $2,945.40 per ounce, marking an increase of 0.57%.
Conversely, oil futures faced declines as investors anticipated a resolution to conflicts that could potentially ease supply concerns
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