Market Optimistic About Debt Ceiling Agreement Despite Inflation Concerns and Interest Rate Hike Possibilities

Although strong economic data raised the possibility of further interest rate hikes, the market remained optimistic about the possibility of a debt ceiling agreement.Dow Jones Industrial Averageup 0.2%,S&P 500 Indexup 0.26%,NasdaqThe index rose 0.2 percent,fee halfUp 1.54%.

Republican and White House negotiators have narrowed differences in talks in recent days and are moving closer to a two-year deal that would raise the debt ceiling and limit federal spending, according to people familiar with the matter. However, the details of the agreement are tentative and a final deal has yet to be reached, the people said.

Debt ceiling talks weighed on market sentiment this week, with Treasury Secretary Yellen warning that the U.S. could default on its debt as early as June 1 if the debt ceiling is not raised.

The latest data on Friday morning showed that inflation rose more than expected in April. As the Fed’s preferred measure of price pressure, the core PCE price index increased by 0.4% month-on-month and 4.7% year-on-year, making it more difficult for the Fed to raise interest rates next.

Oil prices rose on Friday, reversing weakness in the previous session, as Russia played down expectations for further production cuts by OPEC+ at its meeting next month. Russian Deputy Prime Minister Alexander Novak said on Thursday he did not expect new measures from OPEC+ at its June 4 meeting.

As of 21:00 on Friday, Taipei time:

• Dow Jones IndexUp 64.52 points or 0.20%, tentatively at 32829.17 points
• NasdaqUp 32.46 points or 0.26%, tentatively at 12730.56 points
• The S&P 500 rose 8.29 points or 0.20%, tentatively at 4159.57 points
• fee halfUp 51.53 points or 1.54%, tentatively at 3388.25 points
• TSMC ADR up 1.17% to $102.12 per share
• 10-Year U.S. Treasury YieldLittle changed at 3.82%
• N.Y. Light crude rose 1.0% to $72.56 a barrel
• Brent Crude OilUp 0.84% ​​to $76.90 a barrel
• goldUp 0.2% to $1,964.30 an ounce
• dollar indexdown 0.15% to 104.10

Focus stocks:

Meta (META-US) rose 0.89 percent to $254.93

Social media giant Meta has offered to limit the use of other businesses’ advertising data on its Facebook Marketplace service on its own, Britain’s competition watchdog said on Friday, in an effort to address competition allegations from the regulator.

The UK’s Competition and Markets Authority (CMA) has indicated its intention to accept the commitments, which include the option for advertisers to opt out of having their data used to improve the Facebook Marketplace classifieds platform.

Michael Grenfell, executive director of enforcement at the CMA, said: “Reducing the risk of Meta unfairly using data from businesses advertising on its platform to gain a competitive advantage for itself could help the many UK businesses that advertise there.” “We are now negotiating on these commitments, which we believe will address our concerns at this stage.”

ford (F-US) rose 2.46 percent to $11.66

Ford, Tesla (TSLA-US) originally competed with each other, but the two CEOs announced on Thursday (25th) that the two sides will work together on current and future electric vehicle charging projects.

According to the agreement, Ford owners will be able to use more than 12,000 Tesla super charging piles in the United States and Canada through transformers starting early next year. Ford expects that the next-generation electric vehicle launched in the middle of this generation will have a built-in Tesla charging plug, which means that Ford’s new electric vehicle can directly use Tesla’s super charging pile without a transformer. Ford has clearly become the first to be included in Tesla’s charging network. a depot.

Pinduoduo (PDD-US) rose 12.87 percent to $67.74

Pinduoduo’s first-quarter results beat expectations, with strong growth in revenue and net profit.

The financial report shows that Pinduoduo’s total revenue in the first quarter was 37.6371 billion yuanRMB (about 5.4804 billion U.S. dollars), an increase of 58% compared with the 23.7937 billion yuan in the same period in 2022. The net profit attributable to Pinduoduo’s ordinary shareholders was 8.1010 billion yuan, an increase of 212% compared with the net profit of 2.5995 billion yuan in the same period in 2022.

Not in accordance with US General Accounting Standards (Non-GAAP), the net profit attributable to Pinduoduo’s ordinary shareholders was 10.1264 billion yuanRMBan increase of 141% compared with the net profit of 4.2004 billion yuan in the same period of 2022.

Daily key economic data:

• The core PCE price index in the United States increased by 4.7% in April, expected to be 4.6%, and the previous value was 4.6%
• The core PCE price index in the United States increased by 0.4% in April, expected to be 0.3%, and the previous value was 0.3%
• U.S. April PCE price index increased by 4.4% year-on-year, expected 4.3%, previous value 4.2%
• The PCE price index in the United States increased by 0.4% in April, expected to be 0.3%, and the previous value was 0.1%
• U.S. personal consumption expenditures increased by 0.8% in April, expected to be 0.5%, and the previous value was 0.1%
• U.S. merchandise trade account in April (100 million U.S. dollars) -967.68, expected – 859, previous value – 827

Wall Street Analysis:

Citigroup’s strategist team raised the overall rating of US stocks to “neutral”, and at the same time raised the rating of US technology stocks to “overweight”, mainly because the investment frenzy (AI hype) around artificial intelligence (AI) technology will further boost US stocks; at the same time, it is also expected that the Fed’s interest rate hike cycle will end, and the US economic growth rate is more resilient than that of Europe and other places.

Ariane Hayate, fund manager at Edmond de Rothschild Asset Management, said the market is in hesitation at the moment. The debt ceiling is “a factor of increased tension, but the market does not expect to find any resolution.”

Bank of America strategist Ohsung Kwon said in a report that the ability of U.S. companies to quickly adapt to a turbulent overall economic environment is helping the U.S. avoid a recession. Corporate earnings beat Wall Street expectations by 5 percent as companies focused on improving productivity and efficiency.