American Stock Market Recap
The American stock markets closed in the red on Tuesday evening, weighed down by the semiconductor sector following ASML’s accidental release of weak third-quarter numbers. The Dutch semiconductor giant unexpectedly revealed that they are lowering their sales forecast for 2025 and that the order intake only reached just over half of the expected 5.39 billion euros for the third quarter. This, coupled with the negative results and Bloomberg’s disclosure that the US is discussing limited chip exports for Nvidia to certain countries, led to a broad decline in the sector, pulling down the American markets. Additionally, the oil sector weakened yesterday due to a drop in oil prices. While most major banks reported earnings that exceeded expectations, stock prices traded mixed with more declines than gains, possibly due to investors expecting even stronger numbers from the banks. The Dow Jones index was further weighed down by health insurance giant UnitedHealth falling on its quarterly report, closing down by 0.75 percent. The broad S&P 500 index also declined by the same percentage, while the tech-heavy Nasdaq dropped by 1.4 percent.
Commodities Market Update
- Oil prices have recently surged due to escalating geopolitical tensions in the Middle East but have now turned downwards following OPEC’s third consecutive downward revision of the global demand growth forecast for the rest of the year and 2025.
- China’s oil imports decreased for the fifth consecutive month, contributing to the decline in oil prices.
- Gold prices slightly increased due to a drop in US Treasury bond yields, making the metal an attractive investment.
Individual Stock Performances
- Bank of America saw a 0.5 percent increase on its earnings report, while Goldman Sachs and Citigroup declined by 0.1 and 5.1 percent, respectively.
- Within the healthcare sector, UnitedHealth dropped by 8.2 percent, and Johnson & Johnson rose by 1.6 percent.
- In the semiconductor sector, ASML’s premature report release caused a 16.3 percent decline, impacting Nvidia (-4.7%) and AMD (-5.2%) negatively.
Global Market Overview
The US ten-year bond yield fell by six basis points to 4.03 percent. In Asian markets, Chinese stocks traded mixed on Wednesday morning, with volatile trading reflecting recent policy measures in the region. Japan’s market was affected by ASML’s report failure, leading to a decline in the semiconductor sector. Central banks are cautious about raising rates due to potential inflation and wage impacts.
Market Outlook and Recommendations
Stockholm’s Emilshus reported higher operating results but lower net profits. Ericsson received positive target price revisions from various analysts, while Boliden’s recommendation was downgraded to underweight. Telia and Betsson also saw adjustments in their target prices and recommendations.
Upcoming Market Events
On the macroeconomic front, the UK’s consumer and producer price indexes will be released, along with the US import/export price index and monthly budget report from the Department of the Treasury.
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