Breakfast | The Federal Reserve's heavy blow to March rate cut expectations, the three major U.S. stock indexes recorded the largest single-day decline of the year.

Good morning! A wonderful day starts with making money.

Overnight Morning Market

Nasdaq hits the largest decline in nearly a year, three major US stock indices continue to rise for three months, NVIDIA and AMD surge in double digits in January

The Federal Reserve dealt a heavy blow to the market's expectations of interest rate cuts in the near future, causing a collective decline in US stocks and a jump in the US dollar. The Nasdaq fell 2.23%, the S&P 500 fell 1.61%, and the Nasdaq fell for two consecutive days. The Dow Jones Industrial Average fell 0.82%. The S&P 500 index experienced its largest single-day decline since September 21st of last year, the Nasdaq had its largest single-day decline since October 25th of last year, and the Dow Jones had its largest single-day decline since December 20th of last year.

In January, after a continuous decline for three months, the major stock indices saw a consecutive rise for three months, with the S&P 500 up 1.59%, the Dow Jones up 1.22%, the Nasdaq up 1.02%, the Nasdaq 100 up 1.85%, and the Russell 2000 down 3.93% to end its two-month rise.

Most leading technology stocks closed lower. Tesla fell 2.2%. Alphabet fell 7.5% for two consecutive days, Microsoft fell 2.7% for two consecutive days, Meta fell nearly 2.5%. Apple fell 1.9% for six consecutive trading days. Amazon fell 2.4%, while Netflix rose 0.2%.

Among the six major technology stocks, most of them rose in January, with Netflix performing the best, up about 15.9%, followed by Meta, up 10.2%, Microsoft, up 5.7%, Amazon, up nearly 2.2%, Alphabet, up 1.5%, and Apple, down 4.2%. Tesla fell 24.6% in January.

AMD fell 2.5% and rose nearly 13.8% in January; NVIDIA fell about 2% and rose 24.2% in January; Intel rose nearly 0.4%.

Some popular Chinese concept stocks declined. The Nasdaq Golden Dragon China Index fell for five consecutive days, down 14.1% in January. XPeng Motors fell 3.7%, Nio fell nearly 3%, DouYu fell nearly 1%, JD.com fell nearly 0.9%, Alibaba and Tencent fell about 0.2%, Pinduoduo rose over 1%, Bilibili rose 1%, Li Auto rose nearly 0.5%, NetEase rose less than 0.1%, and Baidu rose slightly.

Blue Chips and Hot Stocks

Boeing suspends the release of its 2024 performance forecast.

Walmart plans to open or expand 150 stores in the United States within five years, reversing the company's strategy of focusing on maintaining the same number of stores in the United States for many years.

Media reports that Tesla plans to open a new battery factory in Nevada, equipped with CATL equipment, to produce battery cells for Tesla's Megapack battery products. Tesla is seeking to increase the production of its large-scale commercial energy storage battery (MEGAPACK).

Qualcomm: It is expected that global smartphone sales will remain stable or slightly increase in 2024. The licensing agreement with Apple has been extended to March 2027. Adjusted revenue for the first quarter was $9.92 billion, exceeding market expectations of $9.54 billion. Revenue for the next quarter is expected to be between $8.9 billion and $9.7 billion, with market expectations at $9.36 billion.

Starbucks reported a net revenue of $9.43 billion for the fourth quarter, below market expectations of $9.6 billion but higher than the $8.714 billion in the same period last year. The company lowered its full-year revenue growth forecast from 10%-12% to 7%-9%. Novavax Pharmaceuticals has approved a global layoff of approximately 12%, which is expected to incur costs of approximately $4-7 million.

GlaxoSmithKline's fourth-quarter revenue increased by 15% YoY, and the long-term performance guidance has been revised upwards.

AMD CEO predicts that the server market will grow in 2024, and AMD's growth rate will be faster. Plans are in place to meet the increased demand for AI chips on a larger scale.

New York Community Bank's stock price fell over 37% on Wednesday due to increased loan loss provisions and dividend cuts in the fourth quarter of last year to meet stricter regulatory requirements.

Novo Nordisk becomes the second European company valued at $500 billion after LVMH.

The New York Post reports that Paramount has taken preliminary steps towards a potential sale.

Oriental Selection: New Oriental and Yu Minhong have committed to purchasing a total of HKD 700 million worth of company shares at market price.

WuXi AppTec expects sales revenue to increase by over 100% YoY in 2023, with net profit growth exceeding 80% YoY and adjusted net profit growth exceeding 100%. The company believes that the expected growth is mainly due to the continued activity and development of the antibody-drug conjugate (ADC) industry, as well as the unique competitive advantages of the group in winning projects.

NetEase's first native HarmonyOS game, "Qian Nv You Hun" mobile game, has completed development and the commercial version is ready.

BYD and the government of Szeged, Hungary, have officially signed a land pre-purchase agreement for the BYD Hungary passenger car factory.

Media reports: Huawei's first collaboration with Jianghuai Automobile will be a million-yuan level sedan, targeting the BMW 7 Series, and will be officially launched in the fourth quarter of this year.

MiHoYo has been named by the Chinese Ministry of Industry and Information Technology: the complaint handling rate for "Genshin Impact" is only 39.3%.

Saudi Arabia is reportedly considering restarting the sale of Saudi Aramco shares, potentially raising billions of dollars.

Macro: Taking you around the world

Highlights of the Federal Reserve FOMC statement and Powell's press conference

1. Summary of the statement: Interest rates are maintained as expected, the wording "may further tighten policy" is removed, and it is stated that the target risks are "tending to a better balance" and any adjustments to interest rates will be considered; interest rate cuts will not occur until there is more confidence that inflation is approaching 2%.

2. Interest rate outlook: Powell stated that interest rates may have peaked and are already in a restrictive range; prepared to maintain current rates for the long term if necessary; no rate cut suggestions were made at this meeting and rate cuts were not actively considered; there is a wide range of opinions on rate cuts within the committee; it is unlikely that a rate cut will occur in March; rate cuts may be delayed or brought forward based on data; it is uncertain how many months of low inflation are needed to gain "confidence".

3. Inflation outlook: The statement states that inflation has eased but remains elevated; policy adjustments will be made if there are risks to the inflation target; Powell stated that inflation forecasts may be revised downwards and does not want inflation to fall below 2%.

4. Economic outlook: Powell stated that he cannot say that a soft landing has already been achieved (differing from Yellen's view) and expects growth to slow down; labor demand exceeds supply and rebalancing continues; there are doubts about future productivity growth.

5. Balance sheet situation: Powell mentioned that the meeting today discussed the pace of balance sheet reduction and will have further discussions in March. Market Reaction: During Powell's speech, spot gold erased a $20 intraday gain, risk assets such as US stocks plummeted, and US bond yields rose rapidly, but remained in a downward trend during the day.

According to CME's "Fed Watch": The probability that the Fed will maintain interest rates in the range of 5.25% to 5.50% in March is 64.5%, and the probability of a 25 basis point rate cut is 35.5%.

JPMorgan maintains its expectation that the Fed will make its first rate cut in June, but after Powell's speech, it is not difficult to see that employment and inflation data will likely lead the committee to cut rates in May.

The Hong Kong Monetary Authority keeps the benchmark interest rate unchanged at 5.75%.

In January, the ADP employment report in the United States recorded a smaller-than-expected increase of 107,000, the smallest since November 2023.

The Shanghai headquarters of the People's Bank of China: Enhancing the guiding role of the Loan Prime Rate (LPR) in actual loan interest rates to stabilize and reduce financing costs for the real economy.