[Rui Kan America]

What happened?

Investors cheered a drop in U.S. consumer confidence

  Zhongxin Finance, June 25 (Reporter Xie Yiguan) The US consumer confidence index hit a record low in June, but it has become "good news" for the stock market.

After the sharp correction a few days ago, on June 24 (Friday) local time, the three major U.S. stock indexes opened higher and moved higher, closing up collectively.

U.S. stocks rise, Dow regains 31,000 points

  U.S. stocks rose across the board. As of the close, the Dow rose 823.32 points, or 2.68%, to 31500.68 points; the Nasdaq rose 3.34% to 11607.62 points; the S&P 500 rose 3.06% to 3911.74 points.

This week, the Dow rose 5.39%, the Nasdaq rose 7.49%, and the S&P 500 rose 6.45%.

U.S. stocks closed at the close.

  Large technology stocks performed strongly. On Friday, Meta rose 7.19%, Netflix and Google A rose more than 5%, Tesla rose more than 4%, Amazon and Microsoft rose more than 3%, and Apple rose more than 2%.

  Perhaps affected by the nearly doubling of bookings in the second quarter compared to the first quarter, Carnival Cruises surged 12.4%, and U.S. cruise stocks rose sharply. Royal Caribbean Cruises and Norwegian Cruise Line both rose by more than 15%.

  In addition, US stock bank stocks also generally rose, Wells Fargo rose more than 7%, Goldman Sachs and Morgan Stanley rose more than 5%.

The day before, the Federal Reserve announced the results of the latest bank stress test after the market closed, and all 33 large financial institutions tested passed.

European stocks, Asia-Pacific stock markets have risen

  U.S. stocks performed strongly, and European stock markets also swept away the previous haze on Friday and rose one after another. Among them, the French CAC40 index rose 3.23%; the British FTSE 100 index rose 2.68%; the German DAX index rose 1.59%.

Some European stock markets closed on the 24th.

  The major stock indexes in the Asia-Pacific stock market also strengthened. On Friday, the Korean Kospi closed up 2.26%; the Nikkei 225 closed up 1.23%; the Australian common stock index and the New Zealand stock market NZ50 index also rose more than 1%.

U.S. Treasuries, Gold "Up", Dollar "Down"

  In the context of the Fed's shrinking balance sheet and continued interest rate hikes, long-term yields have been pushed higher.

On Friday, U.S. bond yields rose collectively. The 3-year U.S. bond yield rose 2.4 basis points to 3.155%, the 5-year U.S. bond yield rose 4 basis points to 3.193%, and the 10-year U.S. bond yield rose 4.4 basis points. The basis point was at 3.138%.

  As a reserve asset, the most actively traded August gold futures price in the New York Mercantile Exchange gold futures market rose $0.5 from the previous trading day on the 24th to close at $1,830.3 an ounce, an increase of 0.03%.

  The U.S. dollar index, which measures the U.S. dollar against six major currencies, fell 0.23% to 104.1870 as of late trading in New York as panic eased.

Data map: US dollars.

Photo by Liu Yanghe of China-Singapore Finance and Economics

Do bad economic data boost U.S. stocks?

  On Friday, the final value of the U.S. consumer confidence index for June released by the University of Michigan was revised down to 50, a record low, down 14.4% from the previous value of 58.4 and down 41.5% year-on-year.

About 79% of consumers expect bad business conditions in the year ahead, the highest level since 2009.

  But some analysts believe that this bad news has become "good news" for the stock market.

"

Investors cheered the decline in the University of Michigan's consumer confidence index in June

." In response, CNN reported that

growing fears of a recession may mean that the Federal Reserve, which has begun to aggressively raise interest rates to fight inflation, may not wait until the end of 2023. Change direction

and cut rates again to combat the slowdown.

  In addition, consumer 5-year inflation expectations are final at 3.1%, expected at 3.3%, and initially at 3.3%.

The market also believes that this may reduce the urgency of the Fed to raise interest rates aggressively.

  The recent disclosure of multiple data has also relieved people's tense nerves.

  On Friday, the U.S. government released data showing that the total number of new home sales in the United States in May was an annualized 696,000, down 5.9% from the same period last year and an unexpected 10.7% month-on-month increase from the previous value of 629,000.

  The U.S. Labor Department released data on Thursday that the number of Americans filing initial jobless claims fell by 2,000 to 229,000 in the week ended June 18.

Data map: NYSE.

"U.S. stocks are not expected to usher in a sustained rebound"

  "The market has been a bear market rally over the past three sessions, not a deep sell-off situation. While the rally may continue in the future, we believe the medium-term bear market fundamentals remain." Wolfe Research said Chris Senyek believes the next leg of the decline will be driven by recession risks and a downward earnings correction.

  "High inflation, monetary tightening and recession fears have ended the 13-year bull run of U.S. stocks. With the deterioration of fundamentals, U.S. stocks are expected to continue to fall into 'recession trading' in the second half of the year." Previously, U.S. stocks were not expected to usher in a sustained rebound.

  CITIC Securities pointed out that from a fundamental point of view, U.S. consumer confidence has recently dropped to the lowest level in history, and the personal savings rate has also fallen to the level during the financial crisis; since the second quarter, many large U.S. companies have announced layoffs or suspended recruitment; at the same time , the high oil price will have an impact on the capital expenditure and production capacity of enterprises; and the rise in food prices will further squeeze the consumption of the household sector.

  "Considering that GDPNow expects the U.S. GDP growth rate to be 0.0% in the second quarter, we judge that the U.S. economy will fall into recession from the second half of this year, and it will last for at least half a year." CITIC Securities said.

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